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Price Dispersion: Theoretical Considerations and Empirical Evidence from the Marseilles Fish Market

In: Issues in Contemporary Economics

Author

Listed:
  • Alan Kirman

    (European University Institute)

  • Annick Vignes

    (European University Institute)

Abstract

It is an obvious and well-documented fact that identical units of goods are on sale at different prices in the same geographical region to the same consumers.1 Strictly speaking Diamond’s observation that ‘In Walrasian theory all purchases of a homogeneous good occur at the same price’ (Diamond, 1987) is not contradicted by this fact since no two transactions take place at precisely the same time and place and thus any two units of good sold in different transactions cannot really be regarded as units of a homogeneous good. Nevertheless the typical more intuitive explanation given is that a situation in which identical units of a good were sold at similar times in the same market for significantly different prices could not be sustained. In fact one could try to make this argument precise by using a continuity argument where the only parameters differentiating goods were time and space. In this case the argument would be that prices of units of a good with the same physical characteristics available at about the same place and time are similar.

Suggested Citation

  • Alan Kirman & Annick Vignes, 1991. "Price Dispersion: Theoretical Considerations and Empirical Evidence from the Marseilles Fish Market," International Economic Association Series, in: Kenneth J. Arrow (ed.), Issues in Contemporary Economics, chapter 10, pages 160-185, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-1-349-11573-0_11
    DOI: 10.1007/978-1-349-11573-0_11
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    Citations

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    Cited by:

    1. Troy Tassier, 2013. "Handbook of Research on Complexity, by J. Barkley Rosser, Jr. and Edward Elgar," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(1), pages 132-133.
    2. Kathryn Graddy, 2006. "Markets: The Fulton Fish Market," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 207-220, Spring.
    3. Giovanni Dosi, 2012. "Economic Coordination and Dynamics: Some Elements of an Alternative "Evolutionary" Paradigm," LEM Papers Series 2012/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Sandro Sapio, 2004. "Markets Design, Bidding Rules, and Long Memory in Electricity Prices," Revue d'Économie Industrielle, Programme National Persée, vol. 107(1), pages 151-170.
    5. Goyal, S., 2016. "Networks and Markets," Cambridge Working Papers in Economics 1652, Faculty of Economics, University of Cambridge.
    6. Hardle, Wolfgang & Kirman, Alan, 1995. "Nonclassical demand : A model-free examination of price-quantity relations in the Marseille fish market," Journal of Econometrics, Elsevier, vol. 67(1), pages 227-257, May.
    7. Alan Kirman & Sonia Moulet & Rainer Schulz, 2008. "Price Discrimination and Customer Behaviour: Empirical Evidence from Marseille," Working Papers halshs-00349036, HAL.
    8. Sydney Winter & Giovanni Dosi, 2000. "Interpreting Economic Change: Evolution, Structures and Games," LEM Papers Series 2000/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    9. Sanjeev Goyal, 2015. "Networks in Economics: A Perspective on the Literature," Cambridge Working Papers in Economics 1548, Faculty of Economics, University of Cambridge.
    10. Kirman, Alan P. & Vriend, Nicolaas J., 2001. "Evolving market structure: An ACE model of price dispersion and loyalty," Journal of Economic Dynamics and Control, Elsevier, vol. 25(3-4), pages 459-502, March.
    11. Markose, Sheri M & Alentorn, Amadeo & Krause, Andreas, 2004. "Dynamic Learning, Herding and Guru Effects in Networks," Economics Discussion Papers 3732, University of Essex, Department of Economics.
    12. Vignes, Annick & Etienne, Jean-Michel, 2011. "Price formation on the Marseille fish market: Evidence from a network analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 80(1), pages 50-67.
    13. Denis Phan & Stephane Pajot & Jean-Pierre Nadal, 2003. "The Monopolist's Market with Discrete Choices and Network Externality Revisited: Small-Worlds, Phase Transition and Avalanches in an ACE Framework," Computing in Economics and Finance 2003 150, Society for Computational Economics.
    14. Elsler, Laura G. & Drohan, Sarah E. & Schlüter, Maja & Watson, James R. & Levin, Simon A., 2019. "Local, Global, Multi-Level: Market Structure and Multi-Species Fishery Dynamics," Ecological Economics, Elsevier, vol. 156(C), pages 185-195.
    15. Alan Kirman & Sonia Moulet, 2008. "Impact de l'organisation du marché: Comparaison de la négociation de gré à gré et des enchères descendantes," Working Papers halshs-00349034, HAL.
    16. Laure Bazzoli & Véronique Dutraive, 2004. "La conception institutionnaliste du marché comme construction sociale : une économie politique des institutions," Working Papers halshs-00457628, HAL.
    17. Giulioni, Gianfranco & Bucciarelli, Edgardo, 2011. "Agents’ ability to manage information in centralized markets: Comparing two wholesale fish markets," Journal of Economic Behavior & Organization, Elsevier, vol. 80(1), pages 34-49.
    18. Nelson, Robert G. & Turner, Steven C., 1995. "Experimental Examination Of A Thin Market: Price Behavior In A Declining Terminal Market Revisited," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(1), pages 1-12, July.
    19. Alex Coad, 2009. "On the distribution of product price and quality," Journal of Evolutionary Economics, Springer, vol. 19(4), pages 589-604, August.
    20. Antonio Doria, Francisco, 2011. "J.B. Rosser Jr. , Handbook of Research on Complexity, Edward Elgar, Cheltenham, UK--Northampton, MA, USA (2009) 436 + viii pp., index, ISBN 978 1 84542 089 5 (cased)," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 196-204, April.
    21. Bottazzi, Giulio & Dosi, Giovanni & Rebesco, Igor, 2005. "Institutional architectures and behavioral ecologies in the dynamics of financial markets," Journal of Mathematical Economics, Elsevier, vol. 41(1-2), pages 197-228, February.
    22. Kurt Dopfer, 2011. "Economics in a Cultural Key: Complexity and Evolution Revisited," Chapters, in: John B. Davis & D. Wade Hands (ed.), The Elgar Companion to Recent Economic Methodology, chapter 14, Edward Elgar Publishing.

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