Especially in many online markets, consumers can readily observe prices, but may need to inspect products further to assess their suitability. We study the effects of product differentiation and search costs on competition and market outcomes in a tractable model of price-directed consumer search. We find that: (i) firms’ equilibrium pricing always induces efficient search behavior; (ii) for relatively large product differentiation, welfare distortions still occur because some consumers (may) forgo consumption; and (iii) lower search costs lead to stochastically higher prices, which increases firms’ expected profits and decreases their frequency of sales. Consumer surplus often falls when search costs decrease.

特别是在许多在线市场，消费者可以轻松观察价格，但可能需要进一步检查产品以评估其适用性。我们在价格导向的消费者搜索的易处理模型中研究产品差异化和搜索成本对竞争和市场结果的影响。我们发现：（i）企业的均衡定价总是会引发有效的搜索行为；(ii) 对于较大的产品差异化，由于一些消费者（可能）放弃消费，仍然会出现福利扭曲；(iii) 较低的搜索成本导致随机较高的价格，从而增加公司的预期利润并降低其销售频率。当搜索成本降低时，消费者剩余往往会下降。