Equilibrium price dispersion with sequential search
نویسندگان
چکیده
منابع مشابه
Equilibrium 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...
متن کاملEquilibrium Price Dispersion with Sequential Search
Diamond's 'paradox' (1971) showed that in a market where consumers search sequentially and have strictly positive search costs the unique price equilibrium is where all firms charge the monopoly price. This paper demonstrates that Diamond's result depends crucially on the assumption of single commodity search and does not persist when the model is generalised to allow multi-commodity search. A ...
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We characterize optimal contracts for insurance coverage of a service whose price may vary across service providers. Households must engage in costly search to learn the price of a particular service firm, and the presence of insurance reduces incentive to search. We construct a general equilibrium model where the interaction of the insurer, consumers, and service firms endogenously determine t...
متن کاملLarge and Small Sellers: A Theory of Equilibrium 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 sellers 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 ...
متن کاملEquilibrium Price Dispersion with Consumer Inventories
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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ژورنال
عنوان ژورنال: Journal of Economic Theory
سال: 2015
ISSN: 0022-0531
DOI: 10.1016/j.jet.2015.09.004