Sorting and Decentralized Price Competition
نویسندگان
چکیده
منابع مشابه
Sorting and Decentralized Price Competition∗
We investigate the role of search frictions in markets with price competition and how it leads to sorting of heterogeneous agents. There are two aspects of value creation: the match-value when two agents actually trade, and the probability of trading governed by the search technology. We show that positive assortative matching obtains when complementarities in the former outweigh complementarit...
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We investigate under which conditions price competition in a market with matching frictions leads to sorting of buyers and sellers. When buyer’s search strategies are directed by the market prices offered by sellers, positive assortative matching obtains only if there is a high enough degree of complementarity between buyer and seller types. The relevant condition is root-supermodularity ; i.e....
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2008
ISSN: 1556-5068
DOI: 10.2139/ssrn.1139831