In Google We Trust?
30 Pages Posted: 23 Dec 2014
Date Written: December 23, 2014
Abstract
We examine the incentives of a monopolistic search engine, funded by advertising, to provide reliable search results. We distinguish two types of search result: sponsored and organic (not-paid-for). Organic results are most important in searches for online content, while sponsored results are more important in product searches. By modeling the underlying markets for online content and offline products, we can identify the sources of distortions for each type of result, and their interaction. This explicit treatment proves crucial for understanding, not only spillovers across markets, but also fundamental policy issues, such as the welfare effects of integration. In particular, integration of the engine with a small fraction of content providers is welfare-enhancing when incentives to distort are stronger for sponsored than organic search, but welfare-reducing in the opposite case.
Keywords: Search engine bias, internet economics, vertical integration, two-sided markets, antitrust
JEL Classification: L13, L41, L82, L86
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Position Auctions with Consumer Search
By Susan Athey and Glenn Ellison
-
Paid Placement: Advertising and Search on the Internet
By Yongmin Chen and Chuan He
-
An Empirical Analysis of Search Engine Advertising: Sponsored Search in Electronic Markets
By Anindya Ghose and Sha Yang
-
By Sha Yang and Anindya Ghose
-
From Generic to Branded: A Model of Spillover Dynamics in Paid Search Advertising
-
By Juan Feng, Hemant K. Bhargava, ...
-
Search Engine Advertising: Channel Substitution when Pricing Ads to Context
By Avi Goldfarb and Catherine E. Tucker
-
A Dynamic Model of Sponsored Search Advertising
By Song Yao and Carl F. Mela