This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. Forthcoming Articles
  5. Sources of Market Power in Web Search: Evidence from a Field Experiment

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Sources of Market Power in Web Search: Evidence from a Field Experiment

  • Hunt Allcott
  • Juan Camilo Castillo
  • Matthew Gentzkow
  • Leon Musolff
  • Tobias Salz
American Economic Review (Forthcoming)

Abstract

We study the forces behind Google’s large web-search market share. We develop a demand model with switching costs, quality beliefs, and inattention, and estimate it using a field experiment. We find that (i) requiring active choice barely increases Bing’s market share; (ii) Google users paid to try Bing update positively about its quality and many prefer to continue using it; (iii) many Google users defaulted into Bing do not switch back, consistent with inattention. Counterfactuals suggest that eliminating demand frictions doubles Bing’s market share. Successful remedies expose users to alternative search engines, while data sharing mandates have small effects.

Downloads