Item Details

"Transparency and Search Markets"

Savelle, Daniel
Format
Thesis/Dissertation; Online
Author
Savelle, Daniel
Advisor
Bethune, Zachary
Anderson, Simon
Engers, Maxim
Abstract
In search markets where the choices of firms (such as prices) may or may not be observed by consumers prior to search, the set of classic discrete-choice models and the set of ordered-search models generate the same set of equilibrium demand structures. This set equality extends to the supply side of these models if consumers know all prices prior to search (full transparency). However, a firm's incentive to raise prices is increasing in the firm's relative opacity to consumers. In search markets with strategic complementarities, if any firm faces increased opacity, all equilibrium prices increase. Moreover, if an ordered-search market is incorrectly modeled with the equivalent classic discrete-choice model, empirical estimates of firm profit margins and theoretical predictions of market prices are at the lower bound corresponding to full transparency. For data sets that include information about aggregate (or individual) search and selection, I outline an identification strategy that can be used to partially identify the underlying supply-side parameters of the search market without making assumptions about the opacity of the market.
Language
English
Published
University of Virginia, Department of Economics, PHD (Doctor of Philosophy), 2019
Published Date
2019-04-30
Degree
PHD (Doctor of Philosophy)
Collection
Libra ETD Repository
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