Advertising as a Search Deterrent

This paper examines a firm's incentive to supply information through advertising when consumers can choose between buying immediately and searching for additional information. The presence of consumer search, which may lower sales, creates incentives for the firm to deter search. We show that partial information disclosure emerges as a useful tool for search deterrence when the search cost is low. Moreover, informative advertising and consumer search behave as complements in the information production process. Our welfare analysis suggests that, although transparency policies reduce search expenditures and improve match quality, their effectiveness depends heavily on the magnitude of the search cost.