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Risk Attitudes and Internet Search Engines: Theory and Experimental Evidence

Authors: Garcia-Gallego, Aurora - Universitat Jaume I
Georgantzis, Nikolaos - Universitat Jaume I
Pereira, Pedro - Autoridade da Concorrencia
Pernias-Cerrillo, Jose C. - Universitat Jaume I
Keywords: Search engines, incomplete information, biased information, price levels, experiments
Issue Date: 2004
Series/Report no.: NET Institute Working Paper;04-03
Abstract: This paper analyzes the impact on consumer prices of the size and biases of price comparison search engines. We develop several theoretical predictions, in the context of a model related to Burdett and Judd (1983) and Varian (1980), and test them experimentally. The data supports the model's predictions regarding the impact of the number of firms, and the type of bias of the search engine. The data does not support the model's predictions regarding the impact of the size of the search engine. We identified several data patterns, and developed an econometric model for the price distributions. Variables accounting for risk attitudes improved significantly the explanatory power of the econometric model.
Appears in Collections:NET Institute Working Papers Series

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