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Inducing search by periodic advertising

By Amihai Glazer and Refael Hassin

Abstract

A person engaged in search may be uncertain whether the good or job he seeks is still available. Some people may therefore search when the job or good is unavailable; others may stop searching too early. A seller or employer who wants individuals to search should therefore periodically announce that the position or good is still available. The profit-maximizing strategy, however, differs from the socially-optimal one. Online advertising, which allows immediate updating of information by the seller or employer, also alleviates the problem of excessive search. But the seller may have insufficient incentive to adopt online announcements.Search Advertising Vacancies

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