A Simple Model of Equilibrium Price Dispersion
نویسندگان
چکیده
منابع مشابه
Price Dispersion and Short Run Equilibrium in a Queuing Model∗
Price dispersion is analyzed in the context of a queuing market where customers enter queues to acquire a good or service and may experience delays. With menu costs, price dispersion arises and can persist in the medium and long run. The queuing market rations goods in the same way whether firm prices are optimal or not. Price dispersion reduces the rate at which customers get the good and redu...
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A model with two types of consumers, shoppers and captives, is constructed that leads to an equilibrium price dispersion. Shoppers may hold inventories of the good; the level of consumer inventories leads to state-dependent price dispersions. It is shown that prices and quantities display negative serial correlation. The model is tested using grocery store data, which display the predicted corr...
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We develop a search-theoretic model of the product market that generates price dispersion across and within stores. Buyers differ with respect to their ability to shop around, both at different stores and at different times. The fact that some buyers can shop from only one seller while others can shop from multiple sellers causes price dispersion across stores. The fact that the buyers who can ...
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The paper studies equilibrium pricing in a product market for an indivisible good where buyers search for sellers. Buyers search sequentially for sellers but do not meet every seller with the same probability. Specifically, a fraction of the buyers’ meetings lead to one particular large seller, while the remaining meetings lead to one of a continuum of small sellers. In this environment, the sm...
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Many purchases are unplanned and so do not fit comfortably within standard neoclassical consumer theory. We model such ”impulse” purchases by a simple reservation price rule used by impatient consumers. The equilibrium exhibits price dispersion in pure strategies, with lower price firms earning higher profits. The range of price dispersion increases with the number of firms: the highest price i...
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ژورنال
عنوان ژورنال: Journal of Political Economy
سال: 1979
ISSN: 0022-3808,1537-534X
DOI: 10.1086/260796