Search, Obfuscation, and Price Elasticities on the Internet
Open accessAbstract
We examine the competition between a group of Internet retailers who operate in an environment where a price search engine plays a dominant role. We show that for some products in this environment, the easy price search makes demand tremendously price-sensitive. Retailers, though, engage in obfuscation—practices that frustrate consumer search or make it less damaging to firms—resulting in much less price sensitivity on some other products. We discuss several models of obfuscation and examine its effects on demand and markups empirically.
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To counteract the superior capabilities of agents, firms may adopt increasingly sophisticated price obfuscation tactics.
“Furthermore, to counteract the superior capabilities of agents, firms may adopt increasingly sophisticated price obfuscation tactics (Ellison and Ellison 2009).”
From The Coasean Singularity? Demand, Supply, and Market Design with AI Agents (2025) · cites this paper as Ellison and Ellison 2009
The Introduction says improved search tools make firms worse off if they do not obfuscate prices, supporting the proposed incentive to counter stronger search capabilities. It does not establish that firms adopt increasingly sophisticated tactics in response to agents specifically. (LLM, conf=0.83)
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Research works printed but not linked: 15
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- Authors
- Ellison, G., & Ellison, S. F.
- Affiliations
- National Bureau of Economic Research (US)
- Massachusetts Institute of Technology (US)
- ORCID
- Glenn Ellison
- Venue
- Econometrica
- Publisher
- The Econometric Society
- Published
- 2009
- Volume
- 77
- Issue
- 2
- Pages
- 427-452
- ISSN
- 0012-9682 (ISSN-L)
- OpenAlex
- W2892331156
- Cited by
- 562
- References
- 0
- Citations by year
- 2026: 34 · 2025: 41 · 2024: 24 · 2023: 30 · 2022: 35 · 2021: 39 · 2020: 43 · 2019: 34 · 2018: 44 · 2017: 41 · 2016: 38 · 2015: 30 · 2014: 20 · 2013: 35 · 2012: 19
- FWCI
- 63.40
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- Econometrica (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- National Science Foundation (0219205)
- Center for Advanced Study in the Behavioral Sciences, Stanford University
- Center for Advanced Study, University of Illinois at Urbana-Champaign
- Topics
- Social Sciences › Business, Management and Accounting › Marketing › Consumer Market Behavior and Pricing
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
- Social Sciences › Business, Management and Accounting › Strategy and Management › Digital Platforms and Economics
- Keywords
- obfuscation, price elasticity, internet retailers, online retail competition, search frictions, markups, price sensitivity, consumer search behavior
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