Cart (Loading....) | Create Account
Close category search window
 

Competition between Internet search engines

Sign In

Cookies must be enabled to login.After enabling cookies , please use refresh or reload or ctrl+f5 on the browser for the login options.

Formats Non-Member Member
$31 $13
Learn how you can qualify for the best price for this item!
Become an IEEE Member or Subscribe to
IEEE Xplore for exclusive pricing!
close button

puzzle piece

IEEE membership options for an individual and IEEE Xplore subscriptions for an organization offer the most affordable access to essential journal articles, conference papers, standards, eBooks, and eLearning courses.

Learn more about:

IEEE membership

IEEE Xplore subscriptions

3 Author(s)
Mukhopadhyay, T. ; Carnegie Mellon Univ., Pittsburgh, PA, USA ; Rajan, U. ; Rahul Telang

The Internet search engine market has seen a proliferation of entrants over the last few years. While Yahoo! was the early market leader, there has been entry by both lower quality engines and higher quality ones. Prior work on quality differentiation requires that low quality products have low prices, in order to survive in a market with high quality products. However, the price charged to users of search engines is typically zero. Therefore, consumers do not face a trade-off between quality and price. We develop a vertical differentiation model to show that even lower quality engines can survive in this market. A key property of the model is that, due to low costs users who try out one engine may also sample a lower quality engine in the same session. This "residual demand" allows lower products to survive in equilibrium. We consider a two-period dynamic game between an incumbent and an entrant who enters in the second period. The incumbent has the first mover advantage due to early entry and brand loyalty, while the entrant may have a cost advantage, based on superior technology. The interaction of these two effects determines which product has higher quality in equilibrium, We also consider the issue of strategic investments inequality and show that incumbent may under invest or over-invest in its quality depending on entrant's cost structure.

Published in:

System Sciences, 2004. Proceedings of the 37th Annual Hawaii International Conference on

Date of Conference:

5-8 Jan. 2004

Need Help?


IEEE Advancing Technology for Humanity About IEEE Xplore | Contact | Help | Terms of Use | Nondiscrimination Policy | Site Map | Privacy & Opting Out of Cookies

A not-for-profit organization, IEEE is the world's largest professional association for the advancement of technology.
© Copyright 2014 IEEE - All rights reserved. Use of this web site signifies your agreement to the terms and conditions.