Risk Attitudes and Internet Search Engines: Theory and Experimental Evidence

García-Gallego, Aurora; Georgantzis, Nikolaos; Pereira, Pedro; Pernías, José C.

doi:10.2139/ssrn.618242

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Risk Attitudes and Internet Search Engines: Theory and Experimental Evidence

NET Institute Working Paper No. 04-03

56 Pages Posted: 14 Nov 2004

See all articles by Aurora García-Gallego

Nikolaos Georgantzis

LINEEX and University Jaume I of Castellon; Laboratori d'Economia Experimental (LEE)

José C. Pernías

Jaume I University - Department of Economics

Date Written: October 2004

Abstract

This paper analyzes the impact on consumer prices of the size and biases of price comparison search engines. We develop several theoretical predictions, in the context of a model related to Burdett and Judd (1983) and Varian (1980), and test them experimentally. The data supports the model's predictions regarding the impact of the number of firms, and the type of bias of the search engine. The data does not support the model's predictions regarding the impact of the size of the search engine. We identified several data patterns, and developed an econometric model for the price distributions. Variables accounting for risk attitudes improved significantly the explanatory power of the econometric model.

Keywords: Search engines, incomplete information, biased information, price levels, experiments

Suggested Citation: Suggested Citation

García-Gallego, Aurora and Georgantzis, Nikolaos and Georgantzis, Nikolaos and Pereira, Pedro and Pernías, José C., Risk Attitudes and Internet Search Engines: Theory and Experimental Evidence (October 2004). NET Institute Working Paper No. 04-03, Available at SSRN: https://ssrn.com/abstract=618242 or http://dx.doi.org/10.2139/ssrn.618242