American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Sources of Limited Consideration and Market Power in E-Commerce
American Economic Journal: Microeconomics
(pp. 1–29)
Abstract
This article develops techniques for the empirical analysis of repeated sequential search over unordered alternatives using data on consumer search processes. I use these techniques to assess why consumers conduct little search in e-commerce and often pay significantly above the minimum available price for a product. Search costs could explain these facts, as could pre-search seller differentiation: Consumers with low search costs may not visit stores they dislike based on information known before search. I find that seller differentiation is primarily responsible for limited consideration and market power.Citation
Sullivan, Michael Rolland. 2026. "Sources of Limited Consideration and Market Power in E-Commerce." American Economic Journal: Microeconomics 18 (1): 1–29. DOI: 10.1257/mic.20230200Additional Materials
JEL Classification
- D11 Consumer Economics: Theory
- D21 Firm Behavior: Theory
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- L81 Retail and Wholesale Trade; e-Commerce