Cost Flexibility and Price Dispersion
This paper examines the relationship between a firm's cost flexibility and product price dispersion. The author shows that a mean-preserving increase in demand variability need not lead to an increase in the value of flexibility or in the optimal level of flexibility. This is contrary to results in the literature that are achieved by assuming a quadratic cost curve. Copyright 1989 by Blackwell Publishing Ltd.
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Volume (Year): 38 (1989)
Issue (Month): 1 (September)
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