IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-21-00503.html
   My bibliography  Save this article

Active search in the Diamond search model

Author

Listed:
  • Arthur Fishman

    (Ariel University and Bar Ilan University)

Abstract

It is shown that introducing both consumer and firm heterogeneity into Diamond's original search model leads to both price dispersion and active consumer search in equilibrium.

Suggested Citation

  • Arthur Fishman, 2021. "Active search in the Diamond search model," Economics Bulletin, AccessEcon, vol. 41(3), pages 2127-2132.
    • Handle: RePEc:ebl:ecbull:eb-21-00503
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I3-P183.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Varian, Hal R, 1980. "A Model of Sales," American Economic Review, American Economic Association, vol. 70(4), pages 651-659, September.
    2. Asher Wolinsky, 1986. "True Monopolistic Competition as a Result of Imperfect Information," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 493-511.
    3. Dana, James D, Jr, 1994. "Learning in an Equilibrium Search Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(3), pages 745-771, August.
    4. Simon P. Anderson & Regis Renault, 1999. "Pricing, Product Diversity, and Search Costs: A Bertrand-Chamberlin-Diamond Model," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 719-735, Winter.
    5. Huanxing Yang & Lixin Ye, 2008. "Search with learning: understanding asymmetric price adjustments," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 547-564, June.
    6. Cabral, Luís & Gilbukh, Sonia, 2020. "Rational buyers search when prices increase," Journal of Economic Theory, Elsevier, vol. 187(C).
    7. Janssen, Maarten C.W. & Parakhonyak, Alexei & Parakhonyak, Anastasia, 2017. "Non-reservation price equilibria and consumer search," Journal of Economic Theory, Elsevier, vol. 172(C), pages 120-162.
    8. Mariano Tappata, 2009. "Rockets and feathers: Understanding asymmetric pricing," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 673-687, December.
    9. Steven Salop & Joseph Stiglitz, 1977. "Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(3), pages 493-510.
    10. Burdett, Kenneth & Judd, Kenneth L, 1983. "Equilibrium Price Dispersion," Econometrica, Econometric Society, vol. 51(4), pages 955-969, July.
    11. Arthur Fishman, 1996. "Search with Learning and Price Adjustment Dynamics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(1), pages 253-268.
    12. George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69(3), pages 213-213.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fishman, Arthur, 2021. "Finitely repeated search and the diamond paradox," Economics Letters, Elsevier, vol. 205(C).
    2. Gamp, Tobias & Krähmer, Daniel, 2022. "Biased Beliefs in Search Markets," Rationality and Competition Discussion Paper Series 365, CRC TRR 190 Rationality and Competition.
    3. Daniel Garcia & Jun Honda & Maarten Janssen, 2017. "The Double Diamond Paradox," American Economic Journal: Microeconomics, American Economic Association, vol. 9(3), pages 63-99, August.
    4. Cabral, Luís & Gilbukh, Sonia, 2020. "Rational buyers search when prices increase," Journal of Economic Theory, Elsevier, vol. 187(C).
    5. Daniel Garcia & Jun Honda & Maarten Janssen, 2017. "The Double Diamond Paradox," American Economic Journal: Microeconomics, American Economic Association, vol. 9(3), pages 63-99, August.
    6. Atayev, Atabek, 2022. "Uncertain product availability in search markets," Journal of Economic Theory, Elsevier, vol. 204(C).
    7. Joshua Sherman & Avi Weiss, 2017. "On Fruitful And Futile Tests Of The Relationship Between Search And Price Dispersion," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1898-1918, October.
    8. Avi Weiss & Joshua Sherman, 2014. "An Empirical Analysis of Search Costs and Price Dispersion," Working Papers 2014-06, Bar-Ilan University, Department of Economics.
    9. Janssen, Maarten C.W. & Parakhonyak, Alexei & Parakhonyak, Anastasia, 2017. "Non-reservation price equilibria and consumer search," Journal of Economic Theory, Elsevier, vol. 172(C), pages 120-162.
    10. Alexei Parakhonyak & Anton Sobolev, 2015. "Non‐Reservation Price Equilibrium and Search without Priors," Economic Journal, Royal Economic Society, vol. 0(584), pages 887-909, May.
    11. Atabek Atayev, 2022. "Information Asymmetry and Search Intensity," Papers 2206.04576, arXiv.org.
    12. Atabek Atayev, 2021. "Uncertain Product Availability in Search Markets," Papers 2109.15211, arXiv.org.
    13. Jun Honda, 2015. "Intermediary Search for Suppliers in Procurement Auctions," Department of Economics Working Papers wuwp203, Vienna University of Economics and Business, Department of Economics.
    14. Obradovits, Martin, 2017. "Search and segregation," International Journal of Industrial Organization, Elsevier, vol. 55(C), pages 137-165.
    15. Obradovits, Martin, 2014. "Austrian-style gasoline price regulation: How it may backfire," International Journal of Industrial Organization, Elsevier, vol. 32(C), pages 33-45.
    16. Sven Heim, 2021. "Asymmetric cost pass-through and consumer search: empirical evidence from online platforms," Quantitative Marketing and Economics (QME), Springer, vol. 19(2), pages 227-260, June.
    17. Maarten Janssen & Paul Pichler & Simon Weidenholzer, 2009. "Sequential Search with Incompletely Informed Consumers: Theory and Evidence from Retail Gasoline Markets," Vienna Economics Papers 0914, University of Vienna, Department of Economics.
    18. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, Enero.
    19. Dutta, Champa Bati & Das, Debasish Kumar, 2017. "What drives consumers' online information search behavior? Evidence from England," Journal of Retailing and Consumer Services, Elsevier, vol. 35(C), pages 36-45.
    20. Sander Heinsalu, 2018. "Competitive pricing despite search costs if lower price signals quality," Papers 1806.00898, arXiv.org.

    More about this item

    Keywords

    Diamond paradox; active search; price dispersion;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-21-00503. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.