Title: Essays on Consumer Search Dynamic Competition and Regulation
Abstract: textabstractThe last several decades have seen two important changes in the world around us.
First, the role of information in the modern world is by far more important than
in previous days. It is hard to imagine a day when one does not use products
of the informational technology industry. Entire industries nowadays work with
information, and the company with the highest stock value (Microsoft) in the
world is an icon of the informational technology industry. These changes affected
consumers as well. The product universe became much richer and consumers are
each day bombarded by thousands of advertising messages from different firms.
Second, the world is becoming more fast and dynamic, time and intertemporal
considerations play a prominent role nowadays. A large part of recent inventions
are focused on ways to use the available time more efficiently: easier ways of communication,
faster transportation, easier housing equipment. This thesis touches
upon certain aspects of these two phenomena.
The first part of the thesis focuses on the role of information in consumer
markets. Information about prices, product characteristics, etc. is costly to
obtain for consumers. Therefore, consumers have to optimize the process of
obtaining this information. Firms, in turn, adjust their behaviour in a particular
way in order to profit form informational imperfections in the market. The first
part of the thesis studies various issues of optimal customer behaviour as well as optimal behaviour of firms in the case when there are some informational frictions
in the market.
The second part of the thesis considers the role of time and dynamics for the
functioning of different markets. In markets with free competition, intertemporal
relations can be important for a firm’s decision whom to compete against in
order to influence the balance of powers in the industry. In service markets with
regulated prices, different processing times can play a crucial role in an agent’s
decisions to accept or reject customers or be a reason for a moral hazard problem.
These issues are covered in the second part of the thesis.
Publication Year: 2005
Publication Date: 2005-10-01
Language: en
Type: article
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Cited By Count: 9
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