Abstract

http://ssrn.com/abstract=2163244
 
 

Citations (1)



 


 



Market Dominance and Quality of Search Results in the Search Engine Market


Ioannis Lianos


University College London - Faculty of Laws

Evgenia Motchenkova


VU University Amsterdam - Department of Economics; TILEC

October 1, 2012

CLES Working Paper Series 2/2012

Abstract:     
We analyze a search engine market from a law and economics perspective and incorporate the choice of quality improving innovations by a search engine platform in a two-sided model of internet search engine. In the proposed framework we first discuss the legal issues the search engine market raises for antitrust policy through analysis of several types of abusive behavior by the dominant search engine. We also explore the possible consequences of monopolization of the search engine market for advertisers and users in the form of excessive pricing and deterioration of the quality of the search results. Second, in the technical analysis part we incorporate these considerations in a two-sided market model and analyze the rate of innovation, pricing, and quality choices by the dominant search engine. Our findings show that a dominant monopoly platform results in higher prices and under-investment in quality improving innovations by a search engine relative to the social optimum. More generally, we show that monopoly is sub-optimal both in terms of harm to advertisers in the form of excessive prices, harm to users in the form of reduction in quality of search results, as well as harm to the society in the form of lower innovation rates in the industry.

Number of Pages in PDF File: 39

Keywords: Antitrust Enforcement, Search Engine, Two-sided Markets, Innovation

JEL Classification: K21, L10, L41, L50, L86, L88

working papers series


Download This Paper

Date posted: October 18, 2012  

Suggested Citation

Lianos, Ioannis and Motchenkova, Evgenia, Market Dominance and Quality of Search Results in the Search Engine Market (October 1, 2012). CLES Working Paper Series 2/2012. Available at SSRN: http://ssrn.com/abstract=2163244 or http://dx.doi.org/10.2139/ssrn.2163244

Contact Information

Ioannis Lianos (Contact Author)
University College London - Faculty of Laws ( email )
London WC1E OEG
United Kingdom
44 20 7679 1028 (Phone)
Evgenia Motchenkova
VU University Amsterdam - Department of Economics ( email )
De Boelelaan 1105
1081 HV Amsterdam
Netherlands
TILEC ( email )
Warandelaan 2
Tilburg, 5000 LE
Netherlands
Feedback to SSRN


Paper statistics
Abstract Views: 518
Downloads: 105
Download Rank: 64,968
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.484 seconds