Search, Showrooming, and Retailer Variety

Pricing depends on the selection of consumers and the way that they search. Consumers who search for prices, paradoxically, impose no discipline on prices. Instead, searching for match information does. Showrooming disciplines prices at deep stores (where consumers can learn about many goods in a category). It also leads shallow stores, where showroomers buy, to face a larger fraction of consumers who are insensitive to price. The overall effect of more showrooming can be to raise or lower prices. It depends on the kinds of consumers who showroom. Similarly, a price-only channel can have ambiguous effects.

History: Ganesh Iyer served as the senior editor and Anthony Dukes served as associate editor for this article.

Funding: This work was supported by Spanish Ministry of Economy and Competitiveness [Grants ECO2017-89240-P, RYC-2016-20307, and CEX2019-000915-S] through the Severo Ochoa Programme for Centres of Excellence in R&D.

Supplemental Material: The online appendix is available at https://doi.org/10.1287/mksc.2022.1376.