A theory of search with deadlines and uncertain recall
AbstractWe analyze an equilibrium search model where buyers seek to purchase a good before a deadline and face uncertainty regarding the availability of past price quotes in the future. Sellers cannot observe a potential buyer's remaining time until deadline nor his quote history, and hence post prices that weigh the probability of sale versus the profit once sold. The model's equilibrium can take one of three forms. In a late equilibrium, buyers initially forgo purchases, preferring to wait until the deadline. In an early equilibrium, any equilibrium offer is accepted as soon as it is received. In a full equilibrium, higher prices are turned down until near the deadline, while lower prices are immediately accepted. Equilibrium price and sales dynamics are determined by the time remaining until the deadline and the quote history of the consumer.
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Bibliographic InfoPaper provided by University of Miami, Department of Economics in its series Working Papers with number 2012-3.
Length: 40 pages
Date of creation: 12 Jan 2012
Date of revision:
Publication status: Forthcoming: Under Review
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More information through EDIRC
Equilibrium Search; Deadlines; Uncertain Recall; Price Posting; Reservation Prices;
Find related papers by JEL classification:
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-14 (All new papers)
- NEP-COM-2012-07-14 (Industrial Competition)
- NEP-DGE-2012-07-14 (Dynamic General Equilibrium)
- NEP-HPE-2012-07-14 (History & Philosophy of Economics)
- NEP-MIC-2012-07-14 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- A theory of search with deadlines and uncertain recall
by Christian Zimmermann in NEP-DGE blog on 2012-07-15 16:31:25
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