Price Dispersion Within and Across Stores in a Comparison site

The paper extends the information gatekeeper model of Baye and Morgan(2001) to allow for different levels of store service quality ratings, which are usually observable with the store product prices in the comparison site. The stores use mixed pricing strategies in equilibrium. In particular, higher service quality stores tend to price higher and lower service quality stores tend to price lower in the comparison site. In addition, the monopoly gatekeeper would either charge a click-through fee or a listing fee to maximize profits. In N=2 duopoly case, listing fee only is optimal when shoppers are few and click-through fee only is optimal when the size of shoppers gets larger. I would like to thank my committee members: Professor Michael Baye, Professor Michael Rauh and Professor Roy Gardner for their guidance, helpful comments and encouragements.