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Multi Product Market Equilibrium with Sequential Search

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  • Pedro Cosme Costa Vieira

    ()
    (Faculdade de Economia, Universidade do do Porto)

Abstract

In this paper I investigate whether, in market equilibrium, one observes price dispersion and search when buyers intend to acquire several products whose price is unknown and exists a positive search cost. Although that seems fruitful, I prove that in market equilibrium it is not observed neither price dispersion nor search and shops act as if they where monopolists. Nevertheless, there is one property of the theory that is in accordance with empirical data, namely the continuous increase in the number and dimension of larger shops.

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File URL: http://www.fep.up.pt/investigacao/workingpapers/05.02.07_WP166_pedro.pdf
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Bibliographic Info

Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 166.

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Length: 11 pages.
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:por:fepwps:166

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Related research

Keywords: Search; Price Dispersion; Market Equilibrium; Multi-products;

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References

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  1. McAfee R. Preston, 1995. "Multiproduct Equilibrium Price Dispersion," Journal of Economic Theory, Elsevier, vol. 67(1), pages 83-105, October.
  2. Álvaro Almeida, 2003. "40 Years of Monetary Targets and Financial Crises in 20 OECD Countries," FEP Working Papers 128, Universidade do Porto, Faculdade de Economia do Porto.
  3. Pedro Cosme da Costa Vieira, 2003. "The Impact of Monetary Shocks on Product and Wages: A neoclassical aggregated dynamic model," FEP Working Papers 132, Universidade do Porto, Faculdade de Economia do Porto.
  4. Jorge M. S. Valente & Rui A. F. S. Alves, 2003. "Improved Lower Bounds for the Early/Tardy Scheduling Problem with No Idle Time," FEP Working Papers 125, Universidade do Porto, Faculdade de Economia do Porto.
  5. Pedro Cosme Costa Vieira, 2004. "Market equilibrium with FSS search," Applied Economics Letters, Taylor & Francis Journals, vol. 11(5), pages 323-324.
  6. Jorge M. S. Valente & Rui A. F. S. Alves, 2003. "An Exact Approach to Early/Tardy Scheduling with Release Dates," FEP Working Papers 129, Universidade do Porto, Faculdade de Economia do Porto.
  7. Jorge M. S. Valente & Rui A. F. S. Alves, 2003. "Improved Heuristics for the Early/Tardy Scheduling Problem with No Idle Time," FEP Working Papers 126, Universidade do Porto, Faculdade de Economia do Porto.
  8. Aurora Teixeira & Natércia Fortuna, 2003. "Human Capital, Innovation Capability and Economic Growth," FEP Working Papers 131, Universidade do Porto, Faculdade de Economia do Porto.
  9. Carlson, John A. & McAfee, R. Preston, 1984. "Joint search for several goods," Journal of Economic Theory, Elsevier, vol. 32(2), pages 337-345, April.
  10. Gatti, J. Rupert J., 1999. "Multi-Commodity Consumer Search," Journal of Economic Theory, Elsevier, vol. 86(2), pages 219-244, June.
  11. Jorge M. S. Valente, 2003. "Using Instance Statistics to Determine the Lookahead Parameter Value in the ATC Dispatch Rule: Making a good heuristic better," FEP Working Papers 127, Universidade do Porto, Faculdade de Economia do Porto.
  12. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
  13. Herbert Simon & Lindsay McSweeney, 2010. "A Behavioral Model of Rational Choice," CPI Journal, Competition Policy International, vol. 6.
  14. Burdett, Kenneth & Malueg, David A., 1981. "The theory of search for several goods," Journal of Economic Theory, Elsevier, vol. 24(3), pages 362-376, June.
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