Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282544 
Authors: 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10856
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper studies a model of search engine competition with endogenous obfuscation. Platforms may differ in the quality of their search algorithms. I study the impact of this heterogeneity in consumer surplus, seller profits and platform revenue. I show that the dominant platform will typically induce higher prices but that consumers may benefit from asymmetries. I also show that enabling sellers to price-discriminate across platforms is pro-competitive. I then embed the static model in a dynamic setup, whereby past market shares lead to a better search algorithm. The dynamic consideration is pro-competitive but initial asymmetries are persistent.
Subjects: 
search engine
platform competition
consumer search
JEL: 
D43
D83
L13
M37
Document Type: 
Working Paper
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