The success of a search provider in a competitive environment is closely linked to its popularity with the users. This paper studies the effects of user perception and behaviour on the dynamics of the web search market and presents a model based on factors traditionally left out of economic models, such as the user’s habitual attraction to a particular provider and brand loyalty. It estimates the prevalence of biased switching behaviour in the desktop internet search market and outlines the expected future dynamics of the market, should current trends continue. It further discusses the interpretation of the empirical data concerning the market share, which may be relevant in the context of litigation against Google.
Keywords: Internet search, customer behaviour, competition, modelling