OxTalks is Changing
On 28th November OxTalks will move to the new Halo platform and will become 'Oxford Events' (full details are available on the Staff Gateway).
There will be an OxTalks freeze beginning on Friday 14th November. This means you will need to publish any of your known events to OxTalks by then as there will be no facility to publish or edit events in that fortnight. During the freeze, all events will be migrated to the new Oxford Events site. It will still be possible to view events on OxTalks during this time.
If you have any questions, please contact halo@digital.ox.ac.uk
Obfuscation in Competitive Markets
In many markets, firms increase product complexity through add-on features, which can make the evaluation and comparison of products difficult and thus increase buyers’ search cost. Does this product obfuscation limit buyers’ search behavior and induce them to buy overpriced products? And if so, why does competition not eliminate obfuscated products? We show – based on competitive experimental markets – that if add-ons merely complicate the products without generating additional surplus, obfuscation via product complexity indeed becomes fragile because buyers display an aversion against complex products. However, in the presence of surplus-enhancing add-ons, obfuscation via product complexity becomes a stable market feature that severely constrains the depth and breadth of buyers’ search. Sellers anticipate and take advantage of this by hiding unattractive product features and selling add-ons persistently above marginal cost. Even the most favorably priced product in the market is offered above marginal cost, and buyers persistently fail to find the best product such that inferior products have a good chance of being bought, leading to enduring price dispersion. Surplus-enhancing obfuscation opportunities are the causal driver of persistent profits and price dispersion because if we remove these opportunities, overall prices quickly converge to marginal cost.
Date:
20 May 2025, 16:00
Venue:
Manor Road Building, Manor Road OX1 3UQ
Venue Details:
Seminar Room A
Speaker:
Ernst Fehr (University of Zurich)
Organising department:
Department of Economics
Part of:
Applied Microeconomics Seminar
Booking required?:
Not required
Audience:
Members of the University only
Editor:
Edward Valenzano
