  We modify the standard model of price competition with horizontally
differentiated products, imperfect information, and search frictions by
allowing consumers to flexibly acquire information about a product's match
value during their visits. We characterize a consumer's optimal search and
information acquisition protocol and analyze the pricing game between firms.
Notably, we establish that in search markets there are fundamental differences
between search frictions and information frictions, which affect market prices,
profits, and consumer welfare in markedly different ways. Although higher
search costs beget higher prices (and profits for firms), higher information
acquisition costs lead to lower prices and may benefit consumers. We discuss
implications of our findings for policies concerning disclosure rules and
hidden fees.
