Search costs and cost pass-through: Evidence for the Iranian poultry market

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.