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Argenton, Cédric and Prüfer, Jens 
ORCID: https://orcid.org/0000-0001-7203-9711
(2012)
Search engine competition with network externalities.
Journal of Competition Law and Economics, 8 (1).
pp. 73-105.
ISSN 1744-6414
Abstract
The market for Internet search is not only economically and socially important, it is also highly concentrated. Is this a problem? We study the question of whether "competition is only a free click away." We argue that the market for Internet search is characterized by indirect network externalities and construct a simple model of search engine competition, which produces a market share development that fits well the empirically observed developments since 2003. We find that there is a strong tendency toward market tipping and, subsequently, monopolization, with negative consequences on economic welfare. Therefore, we propose to require search engines to share their data on previous searches. We compare the resulting "competitive oligopoly" market structure with the less-competitive current situation and show that our proposal would spur innovation, search quality, consumer surplus, and total welfare. We also discuss the practical feasibility of our policy proposal and sketch the legal issues involved.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | economics and econometrics,law ,/dk/atira/pure/subjectarea/asjc/2000/2002 |
| Faculty \ School: | Faculty of Social Sciences > School of Economics |
| UEA Research Groups: | Faculty of Social Sciences > Research Centres > Centre for Competition Policy Faculty of Social Sciences > Research Groups > Economic Theory Faculty of Social Sciences > Research Groups > Industrial Economics |
| Related URLs: | |
| Depositing User: | LivePure Connector |
| Date Deposited: | 08 Sep 2022 12:30 |
| Last Modified: | 21 Oct 2023 00:42 |
| URI: | https://ueaeprints.uea.ac.uk/id/eprint/87957 |
| DOI: | 10.1093/joclec/nhr018 |
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