Indeed, Bakos (1997) examined the effects of lower search cost on equilibrium
prices and showed that low search cost may drive Internet prices for homogeneous
goods toward the Bertrand marginal cost pricing pattern. However, by showing the absence
of symmetric pure-strategy equilibrium in which consumers search, Harrington (2001)
2
proved that Bakos’s (1997) results either contained mathematical errors or they were based
on an unjustifiable assumption (Harrington, 2001).