Sources of Limited Consideration and Market Power in E-Commerce
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. (JEL D11, D21, D43, D83, L81)
Fields of Study & Subjects
Consumer Market Behavior and Pricing
Merger and Competition Analysis
Digital Platforms and Economics
Publication details
- Journal / source
- American Economic Journal Microeconomics
- Volume
- 18
- Issue
- 1
- Pages
- 1–29
- Publication date
- 28 January 2026
- Language
- EN