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Nocke, Volker
and Rey, Patrick
(2022)
Consumer Search and Choice Overload.
TSE Working Paper, n. 21-1239, Toulouse
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Abstract
In this paper, we develop a model of within-firm sequential, directed search and study a firm’s ability and incentive to steer consumers. The paper’s main insight is that the firm often benefits from garbling the information it provides to consumers. This induces consumers to keep searching but discourages some of them from visiting the firm—a form of garbling overload. The incentive to garble the information arises even though the firm and the consumers have in common the interest of maximizing the probability of trade—in particular, the setting abstracts from any self-preferencing or bias in favor of particular products. Because of information garbling, an increase in the size of the product line further discourages consumers from visiting the firm—consistent with choice overload.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | 22 October 2022 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Sequential consumer search, product variety, choice overload, multi-product firm, platform |
| JEL Classification: | D42 - Monopoly L12 - Monopoly; Monopolization Strategies L15 - Information and Product Quality; Standardization and Compatibility |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 25 Aug 2021 10:59 |
| Last Modified: | 18 Jul 2023 09:45 |
| OAI Identifier: | oai:tse-fr.eu:125850 |
| URI: | https://publications.ut-capitole.fr/id/eprint/43761 |
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