Comments on "Search, In/ormation, and Market Structure"

When Bob Leiter called to invite me to participate in this conference on the "Economics of Information," I knew immediately that I could not decline. After all, it has become fashionable among economists to talk about various "tastes" such as the "taste for risk," "the taste for discrimination," "the taste for having children", and so forth. Now if there is anything professors are supposed to have, it is a "taste for information." But even students should have that. What differentiates us is that we have a "taste" to spew out or talk about information. True to my profession, I am here to discuss information. On a more serious note, I have read Professor Galatin's paper and find it to be interesting and even provocative but at the same time to possess significant limitations. Galatin attempts to show that by making a few simplifying assumptions, including one that states that the search for market information is conducted on a random basis by consumers so that the resulting market structure in such industries will be random or stochastic. Concentration ratios can, consequently, be described by a probability distribution that could produce all sorts of variation in those ratios. The specific probability density employed in the paper is the multinomial distribution.