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Homepage of the Marie Curie Excellence Grant MEXT-CT-2006-042471 “Search, Switching Costs and the Design of Optimal Competition Policy”
In
real-world markets consumers face search and switching costs. These costs
have received significant theoretical consideration in separate literatures.
The received wisdom is that search and switching costs have pervasive
consequences in markets because they confer market power to the firms. As a
result, prices are often dispersed and higher than what is desirable from a
welfare standpoint. Despite a
significant theoretical effort, search and switching costs are to a large
extent ignored when it comes to competition policy and antitrust economics.
There are at least three reasons for this omission. One, existing work has
largely focused on specific market structures, namely markets with infinitely
many firms (search cost literature) or duopolistic (switching cost
literature) and therefore has failed to examine oligopolistic market
structures (markets with a finite and arbitrary number of firms), far more reaching
in real-world markets and central to antitrust economics. Two, the work on
identification and quantification of search and switching costs is
practically inexistent (see relevant literature below). Three, in many
markets search and switching costs operate at a time and there is no prior
work considering both search and switching costs together. This
project aims at developing a series of demand and supply (market) models of
the interaction of firms and consumers and corresponding econometrics methods
to estimate search and switching costs. As such, the results of the project
should be of interest to regulatory and antitrust authorities.
Team
Leader: Prof. Dr. Jose Luis Moraga (homepage) Post-doc:
Dr. Zsolt Sandor (cv) Post-doc:
Dr. Marielle Non (cv) Post-doc:
Dr. Franco Mariuzzo (from 01/09/07 to 30/10/08) Post-doc:
Dr. Federico Crudu (cv) Ph. D.
student: Vaiva Petrikaite
Theoretical
work: "Strategic Pricing, Consumer Search and the Number of Firms" (M. Janssen and J.L. Moraga-González), Review of Economic Studies, 71, 1089-1118, 2004. (paper). “Truly Costly Sequential Search and Oligopolistic Pricing,” (M. Janssen, M. Wildenbeest and J.L. Moraga-González), International Journal of Industrial Organization 23, 451-466, 2005. (paper) “Mergers in
Consumer Search Markets,” (M. Janssen and J.L.
Moraga-González) (paper) “Competing for
Attention in a Consumer Search Model,” (Marco
Haan and J.L. Moraga-González) (paper). “Mergers, Consumer
Search and Product Differentiation” (J.L. Moraga-González and
V. Petrikaite) (paper) Empirical work: “Maximum Likelihood
Estimation of Search Costs,” (J.L. Moraga-González and M.
Wildenbeest), European Economic Review,
forthcoming. (paper) “Non-Parametric
Identification of the Costs of Search in Non-Sequential Search Models,” (J.L.
Moraga-González, Z. Sandor and M. Wildenbeest). (paper) “Structural Estimation of Search Intensity:
Do Non-employed Workers Search Enough?” (P. Gautier, J.L.
Moraga-González and
R. Wolthoff). (paper) “Asymmetric Price
Effects of Competition” (S. Lach and J.L.
Moraga-González) (paper) ”Semiparametric
Maximum Likelihood Estimation of Market Equilibrium Models” (Z.
Sandor)
1st
Workshop Search and Switching Costs Thursday 17 and Friday 18 December 2009 Venue: Het Kasteel,
Melkweg 1, Groningen |
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