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Multi Product Market Equilibrium with Sequential Search

Author

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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.

Suggested Citation

  • Pedro Cosme Costa Vieira, 2005. "Multi Product Market Equilibrium with Sequential Search," FEP Working Papers 166, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:166
    as

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    File URL: http://www.fep.up.pt/investigacao/workingpapers/05.02.07_WP166_pedro.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Cecilia Chaing & Lindsay McSweeney, 2010. "A Behavioral Model of Rational Choice," CPI Journal, Competition Policy International, vol. 6.
    3. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
    4. Aurora Teixeira & Natércia Fortuna, 2003. "Human Capital, Innovation Capability and Economic Growth," FEP Working Papers 131, Universidade do Porto, Faculdade de Economia do Porto.
    5. 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.
    6. Pedro Cosme Costa Vieira, 2004. "Market equilibrium with FSS search," Applied Economics Letters, Taylor & Francis Journals, vol. 11(5), pages 323-324.
    7. Gatti, J. Rupert J., 1999. "Multi-Commodity Consumer Search," Journal of Economic Theory, Elsevier, vol. 86(2), pages 219-244, June.
    8. Carlson, John A. & McAfee, R. Preston, 1984. "Joint search for several goods," Journal of Economic Theory, Elsevier, vol. 32(2), pages 337-345, April.
    9. 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.
    10. 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.
    11. McAfee R. Preston, 1995. "Multiproduct Equilibrium Price Dispersion," Journal of Economic Theory, Elsevier, vol. 67(1), pages 83-105, October.
    12. 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.
    13. 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.
    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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

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

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    NEP fields

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