Clearinghouse models of online pricing - such as Varian (1980), Rosenthal (1980), Narasimhan (1988), and Baye-Morgan (2001) - view a price comparison site as an "information clearing-house" where shoppers and loyals obtain price and product information to make online purchases. These models...

This paper studies unshrouding decisions in a framework similar to Gabaix and Laibson (2006), but considers an alternative unshrouding mechanism where the impact of advertising add-on information depends on the number of unshrouding firms. We show that shrouding becomes less prevalent as the...

Our study provides empirical insights into the extent to which differential market demographics and differential competition environments affect product prices. Using big data, we find that price variations are caused mainly by differential competitive environments. More specifically, we find...

Emerging tracking data allow precise predictions of individuals' reservation values. However, firms are reluctant to conspicuously implement personalized pricing because of concerns about consumer and regulatory reprisals. This paper proposes and applies a method which disguises personalized...

Over the past four decades, the U.S. economy has seen a decline in the share of young firms alongside a rise in the profit share of GDP. This paper explores how population aging contributes to these twin trends through a demand-side channel. The core hypothesis is that younger households exhibit...

In many (online) markets, consumers can readily observe prices, but need to examine individual products at positive cost in order to assess how well they match their needs. We propose a tractable model of price-directed sequential search in a market where firms compete in prices. Each product...

Sponsored search is the mechanism whereby where advertisers pay a fee to Internet search engines to be displayed alongside organic (non-sponsored) web search results. Based on prior literature, we draw an analogy between these markets and financial markets. We use the analogy as well as the key...

Consumers often have to decide whether to go to a remote store for a lower price. Only the absolute price difference between the stores should be relevant in this case, but several experiments showed that people exhibit relative thinking: they are affected also by the relative savings (relative...

We compare fares offered by Southwest Airlines to those found through Orbitz on-line travel agency. We find that lowest last-minute fares, offered by Southwest, are on average 8.5% higher than the lowest fares one can find on Orbitz. We determine that Southwest offers higher fares as compared to...

Theoretical research on self-selection and cannibalization suggests that brand quality may affect consumers' choice of products from a menu of similar offerings. However, few studies have empirically considered the effect of product variety under brand influence. This paper examines the demand...