How Increasing Supplier Search Cost Can Increase Welfare
B E JOURNAL OF THEORETICAL ECONOMICS(2018)
摘要
Reductions in search costs are generally found to increase efficiency and welfare. Using a simple search model we show that when an upstream firm incurs a search cost to identify a potential trading partner and the two parties then negotiate the wholesale price, a reduction in search cost can actually reduce welfare. Furthermore, in a market driven by seller search, a search cost of zero is never socially optimal.
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关键词
Nash bargaining,search cost,sequential search,social welfare
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