WILSON, C.M., 2010. Ordered search and equilibrium obfuscation. International Journal of Industrial Organisation, 28(5), pp.496-506.
This paper demonstrates the incentives for an oligopolist to obfuscate by deliberately increasing the cost with which consumers can locate its product and price. Consumers are allowed to choose the optimal order in which to search firms and firms are able to influence this order through their choice of search costs and prices. Competition does not ensure market transparency — equilibrium search costs are positive and asymmetric across firms. Intuitively, an obfuscating firm can soften the competition for consumers with low time costs by inducing the remaining consumers to optimally first search its rival.
This paper is also number 401 of the University of Oxford Department of Economics Discussion Paper Series and can be found at: http://www.economics.ox.ac.uk/Research/wp/pdf/paper401.pdf. This is the author's version of the paper. It was accepted for publication in International Journal of Industrial Organisation. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published at: http://dx.doi.org/10.1016/j.ijindorg.2009.12.001
This work was supported by the Economic and Social Research Council [grant number PTA-026- 27-1262].