Matthijs R Wildenbeest

Areas of Expertise

Industrial Organization, Applied Microeconomics, Applied Econometrics

Academic Degrees

• PhD, Erasmus University Rotterdam, 2007
• MPhil, Tinbergen Institute, 2003
• MSc, Erasmus University Rotterdam, 2003

Professional Experience

• Assistant Professor, Kelley School of Business, Indiana University, 2007-present
• Instructor, Department of Economics, Erasmus University Rotterdam, 2006-2007

Awards, Honors & Certificates

• EARIE Young Economist Essay Award 2007
• Encore Masters'' Thesis Prize 2004

Selected Publications

• De los Santos, Babur, Ali Hortaçsu, and Matthijs Wildenbeest (2017), "Search with learning for differentiated products: evidence from E-commerce," Journal of Business & Economic Statistics, 35(4): 626-641.
• Moraga-González, José Luis, Zsolt Sándor, and Matthijs R. Wildenbeest (2017), "Prices and Heterogeneous Search Costs," RAND Journal of Economics, 48(1): 125-146.
• Moraga-González, José Luis, Zsolt Sándor, and Matthijs R. Wildenbeest (2017), "Nonsequential Search Equilibrium with Search Cost Heterogeneity," International Journal of Industrial Organization, 50: 392-414.
• Baye, Michael R., Babur De los Santos, and Matthijs R.Wildenbeest (2016), “Search Engine Optimization: What Drives Organic Traffic to Retail Sites?” Journal of Economics & Management Strategy, 25(1): 6-31.
• Baye, Michael R., Babur De los Santos, and Matthijs R. Wildenbeest (2016), "What''s in a Name? Measuring Prominence, and Its Impact on Organic Traffic from Search Engines," Information Economics and Policy, 34: 44-57.
• Wildenbeest, Matthijs, Monica Giulietti and Michael Waterson (2014), "Estimation of Search Frictions in the British Electricity Market," Journal of Industrial Economics, 62(4): 555-590.

Abstract This paper studies consumer search and pricing behavior in the British domestic electricity market following its opening to competition in 1999. We develop a sequential search model in which an incumbent and an entrant group compete for consumers who find it costly to obtain information on prices other than from their current supplier. We use a large data set on prices and input costs to structurally estimate the model. Our estimates indicate that consumer search costs must be relatively high in order to rationalize observed pricing patterns. We confront our estimates with observed switching behavior and find they match well.

• Moraga-González, José Luis, Zsolt Sándor, and Matthijs R. Wildenbeest (2013), "Semi-nonparametric Estimation of Consumer Search Costs," _Journal of Applied Econometrics,_Vol. 28, No. 7, pp. 1205-1223.

Abstract This paper studies the estimation of the distribution of non-sequential search costs. We show that the search cost distribution is identified by combining data from multiple markets with common search technology but varying consumer valuations, firms'' costs, and numbers of competitors. To exploit such data optimally, we provide a new method based on semi-nonparametric (SNP) estimation. We apply our method to a dataset of online prices for memory chips and find that the search cost density is essentially bimodal such that a large fraction of consumers searches very little, whereas a smaller fraction searches a relatively large number of stores.

• Baye, Michael R., Babur De Los Santos and Matthijs R. Wildenbeest (2013), "Searching for Physical and Digital Media: The Evolution of Platforms for Finding Books," NBER''s Economics of Digitization, ed. by S. Greenstein, A. Goldfarb, and C. Tucker. University of Chicago Press, 137-165.

Abstract This chapter provides a data-driven overview of the dierent online platforms that consumers use to search for books and booksellers, and documents how the use of these platforms is shifting over time. Our data suggest that, as a result of digitization, consumers are increasingly conducting searches for books at retailer sites and closed systems (e.g., the Kindle and Nook) rather than at general search engines (e.g., Google or Bing). We also highlight a number of challenges that will make it dicult for researchers to accurately measure internet-based search behavior in the years to come. Finally, we highlight a number of open agenda items related to the pricing of books and other digital media, as well as consumer search behavior.

• De los Santos, Babur I., Michael R. Baye, and Matthijs Wildenbeest (2013), "The Evolution of Product Search," Journal of Law, Economics & Policy, 9:2, 201-221.
• De Los Santos, Babur I., Matthijs Wildenbeest and Ali Hortaçsu (2012), "Testing Models of Consumer Search using Data on Web Browsing and Purchasing Behavior," American Economic Review, 102(6): 2955-2980.

Abstract Using a large data set on web browsing and purchasing behavior we test to what extent consumers are searching in accordance to various classical search models. We find that the benchmark model of sequential search with a known distributions of prices can be rejected based on both the recall patterns we observe in the data and the absence of dependence of search decisions on observed prices. Moreover, we show that even if consumers are initially unaware of the price distribution and have to learn the price distribution, observed search behavior for given consumers over time is more consistent with fixed sample size search than sequential search with learning. Our findings suggest fixed sample size search provides a more accurate description of observed consumer search behavior. We then utilize the fixed sample size search model to estimate the price elasticities and profit margins of online book retailers.

• Wildenbeest, Matthijs R. (2011), "An Empirical Model of Search with Vertically Differentiated Products," Rand Journal of Economics, Vol. 42, No. 4, Winter, pp. 729-757.

Abstract This paper presents a nonsequential search model that allows for vertical product differentiation. In the unique symmetric equilibrium firms with different characteristics draw utilities from a common utility distribution. Because the firms differ in their characteristics this leads to different price distributions. The model therefore provides a theoretical rationale for explaining price dispersion as a result of quality differences and search behavior of consumers together. Using the equilibrium conditions derived from the model, it is shown how to estimate search costs by maximum likelihood using only price data. A data set on prices from Dutch supermarkets reveals that the amount of search has decreased over the sampling period. Moreover, ignoring vertical product differentiation results in an overestimation of search costs.

• Moraga-González, José Luis and Matthijs R. Wildenbeest (2008), "Maximum Likelihood Estimation of Search Costs,'''' European Economic Review, Vol. 52, No. 5, pp. 820-848.

Abstract In a recent paper Hong and Shum [2006. Using price distributions to estimate search costs. Rand Journal of Economics 37, 257–275] present a structural method to estimate search cost distributions. We extend their approach to the case of oligopoly and present a new maximum likelihood method to estimate search costs. We apply our method to a data set of online prices for different computer memory chips. The estimates suggest that the consumer population can be roughly split into two groups which either have quite high or quite low search costs. Search frictions confer a significant amount of market power to the firms: Despite more than 20 firms operating in each of the markets, we estimate price-cost margins to be around 25%. The paper also illustrates how the structural method can be employed to simulate the effects of the introduction of a sales tax.

• Janssen, Maarten C.W., José Luis Moraga-González, and Matthijs R. Wildenbeest (2005), "Truly Costly Sequential Search and Oligopolistic Pricing," International Journal of Industrial Organization, Vol. 23, pp. 451-466.

Abstract We modify the paper of Stahl (1989) [Stahl, D.O., 1989. Oligopolistic pricing with sequential consumer search. American Economic Review 79, 700–12] by relaxing the assumption that consumers obtain the first price quotation for free. When all price quotations are costly to obtain, the unique symmetric equilibrium need not involve full consumer participation. The region of parameters for which non-shoppers do not fully participate in the market becomes larger as the number of shoppers decreases and/or the number of firms increases. The comparative statics properties of this new type of equilibrium are interesting. In particular, expected price increases as search cost decreases and is constant in the number of shoppers and in the number of firms. Welfare falls as firms enter the market. We show that monopoly pricing never obtains with truly costly search.