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Search Equilibrium with Endogenous Recall

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  • Andrew F. Daughety
  • Jennifer F. Reinganum

Abstract

In search models, the property of "recall" has heretofore been treated as exogenous, with a distinction made between models with "no recall" and models with "perfect recall." However, an alternative interpretation is that recall is provided by the firms. Then, "perfect recall" corresponds to holding the good forever, while "no recall" corresponds to a refusal to hold the good at all. Imperfect recall is provided if a firm agrees to hold the good for a finite number of periods. We show that the commonly observed practice of holding the good for some length of time, while the customer continues to shop elsewhere, can be an equilibrium strategy.

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  • Andrew F. Daughety & Jennifer F. Reinganum, 1992. "Search Equilibrium with Endogenous Recall," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 184-202, Summer.
    • Handle: RePEc:rje:randje:v:23:y:1992:i:summer:p:184-202
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    Citations

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    Cited by:

    1. Armstrong, Mark & Zhou, Jidong, 2010. "Exploding offers and buy-now discounts," MPRA Paper 22531, University Library of Munich, Germany.
    2. Esther Gal-Or & Mordechai Gal-Or & Anthony Dukes, 2007. "Optimal information revelation in procurement schemes," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 400-418, June.
    3. Andrew F. Daughtey & Jennifer F. Reinganum, 2010. "Clients, Lawyers, Second Opinions, and Agency," Vanderbilt University Department of Economics Working Papers 1009, Vanderbilt University Department of Economics.
    4. Ş. Akın & Brennan Platt, 2014. "A theory of search with deadlines and uncertain recall," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(1), pages 101-133, January.
    5. Brennan Platt & Nuray Akin, 2012. "A theory of search with recall and uncertain deadlines," 2012 Meeting Papers 777, Society for Economic Dynamics.
    6. Thomas, Charles J., 2018. "An alternating-offers model of multilateral negotiations," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 269-293.
    7. Krasteva, Silvana & Yildirim, Huseyin, 2012. "On the role of confidentiality and deadlines in bilateral negotiations," Games and Economic Behavior, Elsevier, vol. 75(2), pages 714-730.
    8. Dana, James D, Jr, 2001. "Competition in Price and Availability When Availability is Unobservable," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 497-513, Autumn.
    9. Andrew F. Daughety & Jennifer F. Reinganum, 2011. "Search, Bargaining, And Agency in the Market for Legal Services," Vanderbilt University Department of Economics Working Papers 1106, Vanderbilt University Department of Economics.
    10. José Tudón, 2021. "Can price dispersion be supported solely by information frictions?," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 9(1), pages 75-90, April.

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