Ordered Search and Equilibrium Obfuscation

Abstract. This paper demonstrates the incentives for an oligopolist to obfuscate by deliberately increasing the cost with which consumers can locate its product and price. Consumers are allowed to choose the optimal order in which to search rms and \u85rms are able to inuence this order through their choice of search costs and prices. Competition does not ensure market transparency- equilibrium search costs are positive and asymmetric across \u85rms. Intuitively, an obfuscating rm can soften the competition for consumers with low time costs by inducing the remaining consumers to optimally \u85rst search its rival. 1