Behavioral economics

At the heart of the United States Google Search case is the monopolizing effect of Google securing for its own search offering the status of default search engine on a web browser, such as Safari, Chrome, or Firefox. The authors review the behavioral economics and empirical evidence of this effect and suggest several conduct and structural remedies to open up the search market to competition.

Recent antitrust interventions have put forward behaviorally informed theories of harm. However, they have adopted a deterministic model of behavior, missing the nuances that allow behavioral economics to provide a richer picture of people’s conduct. The recently concluded Google trial, grounded on the stickiness of defaults, is a good example. A more careful application of behavioral economics would have shown how Google’s purchase of default search engine status was a part of a broader monopolization plan. It would also show why the dominant remedy, forced choice, would have negligible effects.

Richard Thaler's thought process and perspective on human behavior have influenced how we view economic phenomena and how they affect and are effected by people.     Earlier...