Influencing search

Maarten C. W. Janssen; Cole Williams

doi:10.1111/1756-2171.12475

Titel

Influencing search

Autor*in

Maarten C. W. Janssen

Universität Wien

Cole Williams

Universität Wien

Abstract

We show that in search markets an influencer who recommends a product to her followers improves consumer surplus and total welfare despite the firm paying for her recommendation. As consumers learn their value for the product upon search, they will not buy at the recommended firm if they learn their value is low. The threat of search incentivizes firms to offer the influencer a financial contract involving a commission and incentivizes the influencer to be honest in her recommendation. Provided the influencer's search cost is not too high, she also has an incentive to acquire information and give informative recommendations. These informative equilibria are more difficult to sustain if influencers compete with each other.

Stichwort

consumer searchproduct differentiationsocial media influencers

Objekt-Typ

journal article

Sprache

Englisch [eng]

Persistent identifier

phaidra.univie.ac.at/o:2104777

DOI

10.1111/1756-2171.12475

Erschienen in

Titel