Abstract
This study employs the per capita number of mobile internet users as a proxy for search costs to examine the potential impact of new information technologies on cost pass-through on the Iranian poultry market. We find that the per capita number of mobile internet users in space and time leads to lower prices and a higher cost pass-through. Deviations from the price-cost equilibrium reduce more quickly when access to the mobile internet becomes more widespread. All results support the hypothesis that new information technologies have positive effects on market competition.
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