The Economics of Information, Frictions, and Consumer Behavior

Download or read book The Economics of Information, Frictions, and Consumer Behavior written by Garrett T. Senney and published by . This book was released on 2016 with total page 172 pages. Available in PDF, EPUB and Kindle. Book excerpt: The third chapter examines consumer search behavior in the market for 3D enabled high definition televisions. Utilizing a newly develop methodology, I examine price dispersion in a vertically differentiated market and separately identify the effects of search friction and product differentiation on price. I estimate that 65.6% of the price variation in this market is explained by search friction with the rest being attributable to vertical differentiation. Furthermore, I find that the search intensity in this market polarized: 69% of consumers only search one store while 17% of consumers search all the stores. My analysis concludes that search frictions are relatively more important than vertical differentiation in explaining the price dispersion in the 3D HDTV market.