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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 Post-doc: Dr. Zsolt
Sandor Post-doc: Dr.
Marielle Non (from 01/08/08 to 31/08/10) Post-doc: Dr.
Franco Mariuzzo (from 01/09/07 to 30/10/08) Post-doc: Dr.
Federico Crudu (from 16/08/09 to 16/08/11) Ph. D. student: Vaiva Petrikaite
Ph.D. Thesis The Effects of Costly Consumer Search on Mergers
and Cartels (Vaiva Petrikaite) Theoretical papers: Platform Intermediation in a Market for Differentiated Products (joint
with Andrea Galeotti) European Economic Review, 53, 417-428, 2009. Competing for Attention in a Consumer Search Model
(Marco Haan and J.L. Moraga-Gonzalez), The Economic Journal,
121, 552-579, 2011. Consumer Search Costs and the Incentives to
Merge under Bertrand Competition (J.L. Moraga-Gonzalez and V.
Petrikaite) Tinbergen Institute Discussion Paper # TI 2011-099/1, The
Netherlands, June 2010. (Revise and resubmit to the RAND Journal of
Economics) Comparison Sites
(with M. Wildenbeest), Handbook of the Digital Economy,
forthcoming.
Horizontal Mergers and Economies of Search
(J.L. Moraga-Gonzalez and V. Petrikaite) On Mergers in Consumer Search Markets (M.
Janssen and J.L. Moraga-Gonzalez) Tinbergen Institute Discussion Paper #
07-054/1, The Netherlands, June 2007 Non-sequential Search Equilibrium with Search Cost Heterogeneity IESE
Business School Working Paper WP-869, July 2010. Isolation
or Joining a Mall? On the Location Choice of Competing Shops (Marielle
Non), MPRA WP # 20044, January 2010. A Model of Switching Costs with Boundedly Rational Consumers
(Marielle Non). Heterogeneous Price Information and
the Effect of Competition (S. Lach and J.L.
Moraga-Gonzalez)
Empirical papers: Coverage
of retail stores and discrete choice models of demand: Estimating price
elasticities and welfare effects
(F. Mariuzzo, P.P. Walsh and C. Whelan), International
Journal of Industrial Organization 28 (2010) 555-578. Maximum Likelihood Estimation of
Search Costs (J.L. Moraga-Gonzalez and M. Wildenbeest), European
Economic Review, 52, 820-848, 2008. Estimating the Price Overcharge from Cartelisation of the
Irish Automobile Industry (F. Mariuzzo, P.P. Walsh and O.
van Parys.) The Economic and Social Review, 40(2):165–182, 2009.
(paper) Semi-Nonparametric Estimation of Consumer
Search Costs (J.L. Moraga-Gonzalez, Z. Sandor and M. Wildenbeest) revised and
resubmitted to the Journal of Applied Econometrics. On the Identification of the
Costs of Simultaneous Search (J.L. Moraga-Gonzalez,
Zsolt Sandor and Matthijs Wildenbeest), Tinbergen Institute Discussion Paper
# 2010-066/1, The Netherlands, 2010. Consumer
Search and Prices in the Automobile Market (J.L.
Moraga-Gonzalez, Z. Sandor and M. Wildenbeest), 2011. Conditional EL for dependent data (F.
Crudu and Z. Sandor) MC Simulation of Discrete Choice Models Involving Large Sums (Z.
Sandor). Asymmetric Price Effects of
Competition (S. Lach and J.L. Moraga-Gonzalez) CEPR Discussion Paper 7319,
June 2009. Semi-parametric Maximum Likelihood Estimation of Market
Equilibrium Models (Z. Sandor) Other related papers: Strategic Pricing, Consumer Search and the Number
of Firms (M. Janssen and J.L. Moraga-Gonzalez), Review
of Economic Studies, 71, 1089-1118, 2004. Truly Costly Sequential
Search and Oligopolistic Pricing (M. Janssen, M. Wildenbeest and
J.L. Moraga-Gonzalez), International Journal of Industrial Organization
23, 451-466, 2005.
Structural Estimation of Search Intensity: Do Non-employed Workers Search Enough? (P. Gautier, J.L. Moraga-Gonzalez and R. Wolthoff), Tinbergen Institute Discussion Paper # 2007-071/3, The Netherlands, 2007.
1st Workshop Search and Switching Costs Thursday 17 and Friday 18 December 2009 Venue:
Het Kasteel, Melkweg 1, Groningen ********************* 2nd Workshop Search and Switching Costs |
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