Theme:Industry-optimal Information in Search Market

Lecturer：Hu Ju，national Development Research Institute of Peking University

Time：2022.04.14 14:00

Site：Tencent meeting：246-772-862

  Abstract：

  This paper studies the welfare effects of information in a sequential consumer search environment. Consumers search in the market and observe a noisy signal about the match value upon being matched with a firm, based on which they make their purchasing decisions. We construct the class of conditional unit-elastic demand signal distributions such that every equilibrium that can possibly arise under a feasible signal distribution can be achieved by a signal distribution within this class, based on which we investigate the industry-optimal information in this market. Contrary to the conventional wisdom that lower search cost promotes competition and reduces industry surplus, we find that the optimal industry surplus is strictly increasing as the search cost decreases. We also characterize the industry-optimal signal distribution for a large class of value distributions.

  Introduction to the lecturer：

  Hu Ju, Ph.D. in Economics, University of Pennsylvania, professor of National Development School, Peking University. His main research areas are microeconomic theory, game theory and information economics. His research results have been published in The top journals of Economic Theory, The Rand Journal of Economics, etc.