Price Dispersion with Directed Search1
نویسندگان
چکیده
We model a market where identical buyers direct their search to identical capacity-constrained sellers. Sellers cannot fully commit to the list price so strategic bargaining may determine the sale price. We study search and pricing behavior in symmetric equilibrium. Sale prices exhibit equilibrium dispersion as they respond naturally to local demand conditions. Uncoordinated search decisions lead to equilibrium demand heterogeneity, so sellers realizing large demand bargain prices up. We characterize the sale price distribution parametrically, studying how different commitment limitations and market features affect pricing and surplus shares. We also determine endogenously the pricing institution. Implications for labor and goods markets are explored.
منابع مشابه
Dynamic Directed Search†
The directed search model (Peters, 1984) is static; its dynamic extensions typically restrict strategies, often assuming price or match commitments. We lift such restrictions to study equilibrium when search can be directed over time, without constraints and at no cost. In equilibrium trade frictions arise endogenously, and price commitments, if they do exist, are self-enforcing. In contrast to...
متن کاملSearch for Highly Ionizing Particles in E+e-collisions at ,/i = 29 Gev*
The results of the analysis of data taken in the continuation of a previously reported search1 for highly ionizing particles at PEP are presented. These data were taken in the period from October 1981 to June 1983. Assemblies consisting of Lexan and CR-39 plastic track detectors were exposed in two runs to integrated luminosities of 30 X 1O36 cm-2 and 150 X 10% crnw2% The search was sensitive t...
متن کاملPrice dispersion under the Adverse Selection Environment
The price dispersion means different prices for same goods. In the Internet economy, many economists reckon that the price dispersion in the e-commerce markets should descend along with the dropping of search cost. However, the correlative empirical studies reach a contrary opinion: there not only exist price dispersion in the e-commerce market, but also has larger dispersion degree than the tr...
متن کاملPrice Dispersion and Competition with Differentiated Sellers∗
I measure price dispersion among differentiated retail gasoline sellers and study the relationship between dispersion and the local competitive environment. Significant price dispersion exists even after controlling for differences in station characteristics, and price differences between sellers change frequently. The extent of price dispersion is related to the density of local competition, b...
متن کامل