Equilibrium Price Dispersion in a Matching Model with Divisible Money*
نویسندگان
چکیده
منابع مشابه
Money and Price Dispersion
We relax restrictions on the storage technology in a prototypical monetary search model to study price dispersion. When multiple units of currency can be stored, buyers and sellers enter matches with potentially different willingness to buy or sell. Across the distribution of possible bilateral matches, prices will generally differ even though agents have identical preferences and technologies....
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We introduce heterogeneous preferences into a tractablemodel ofmonetary search to generate price dispersion, and then examine the effects of money growth on price dispersion and welfare. With buyers’ search intensity fixed, we find that money growth increases the range of (real) prices and lowers welfare as agents shift more of their consumption to less desirable goods.When buyers’search intens...
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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...
متن کاملEquilibrium price dispersion with sequential search
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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ژورنال
عنوان ژورنال: International Economic Review
سال: 2004
ISSN: 0020-6598,1468-2354
DOI: 10.1111/j.1468-2354.2004.00131.x