Price commitment in search markets

Search frictions and market power in negotiated price markets∗

This paper provides a framework for the empirical analysis of negotiated-price markets in which buying is single-source. These markets pose a challenge for empirical work since, although buyers potentially negotiate with many sellers, data-sets typically include only accepted offers. Moreover, negotiated-price markets feature search frictions, since consumers incur a cost to gather quotes, and ...

Search and Price Dispersion in Online Grocery Markets

Prices for similar products often differ between retail outlets, leading consumers to actively search for products that meet their needs at the lowest possible price. Prices differ among retailers, and search intensity differs among consumers because search is a costly activity and consumers differ in their costs of search. How variety and the multiproduct nature of retailing affect search cost...

Application of an Improved Neural Network Using Cuckoo Search Algorithm in Short-Term Electricity Price Forecasting under Competitive Power Markets

Accurate and effective electricity price forecasting is critical to market participants in order to make an appropriate risk management in competitive electricity markets. Market participants rely on price forecasts to decide on their bidding strategies, allocate assets and plan facility investments. However, due to its time variant behavior and non-linear and non-stationary nature, electricity...

Commitment in First-Price Auctions

We study a variation of the single-item sealed-bid first-price auction wherein one bidder (the leader) publicly commits to a strategy before the others submit their bids. We fully characterize the committed mixed strategy that is optimal for the leader, and find that the leader and the follower with the highest valuation strictly benefit from the commitment. We further show that compared with t...

Price Volatility in Ethanol Markets