Accurate, Focused Research on Law, Technology and Knowledge Discovery Since 2002

Price Comparison Websites

Price Comparison Websites, David Ronayne, February 2015. WARWICK ECONOMIC RESEARCH PAPERS.
“Price comparison websites are commonly thought to benet consumers by increasing competitive pressure between rms, in turn lowering prices faced by consumers. This article investigates the impact of the introduction of a PCW or ‘web aggregator’ to the market for a homogeneous good. We finnd that the introduction of a PCW increases prices, harming consumers. Under competing aggregators, consumer welfare does not improve when consumers check only one, and is only guaranteed to improve when they check all of them. Furthermore, when consumers do not check all, increasing the number of aggregators can increase prices. All equilibria feature price dispersion.”

Sorry, comments are closed for this post.