The article explores how pricing strategies and consumer search behavior affect the number of firms in a market. The researchers from Erasmus University Rotterdam and Tinbergen Institute studied how firms set prices strategically to attract customers who search for the best deals. They found that when consumers search more, firms tend to charge lower prices to compete for their business. This competition leads to more firms entering the market. In contrast, when consumers search less, firms can charge higher prices, resulting in fewer firms in the market.