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Limited Memory Consumers and Price Dispersion

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  • Levent Kutlu

Abstract

We examine the effects of limited consumer memory on the pricing strategies of competing firms. We show that when the valuations of consumers are heterogeneous, it is possible to observe price dispersion even when each firm charges a single price. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Levent Kutlu, 2015. "Limited Memory Consumers and Price Dispersion," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(4), pages 349-357, June.
    • Handle: RePEc:kap:revind:v:46:y:2015:i:4:p:349-357
    DOI: 10.1007/s11151-015-9452-5
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