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Search and price competition

Author

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  • Roger Waldeck

    (IMT Atlantique - LUSSI - Département Logique des Usages, Sciences sociales et Sciences de l'Information - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

Abstract

This paper qualifies and quantifies what is meant by higher price level and dispersion in an oligopoly market with imperfectly informed consumers for both Fixed Sample Search and Sequential Search. The objective is to identify the conditions under which prices become lower and price dispersion reduces as a function of consumers? information. Surprisingly, the mean price is an increasing function of search intensity and price dispersion is an inverse U-shaped function of the proportion of informed consumers.

Suggested Citation

  • Roger Waldeck, 2008. "Search and price competition," Post-Print hal-02161480, HAL.
    • Handle: RePEc:hal:journl:hal-02161480
    DOI: 10.1016/j.jebo.2006.02.009
    Note: View the original document on HAL open archive server: https://hal.science/hal-02161480v1
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    References listed on IDEAS

    as
    1. Stigler, George J., 2011. "Economics of Information," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 35-49.
    2. Roger Waldeck & Eric Darmon, 2006. "Can boundedly rational sellers learn to play Nash?," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 1(2), pages 147-169, November.
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    6. Rosenthal, Robert W, 1980. "A Model in Which an Increase in the Number of Sellers Leads to a Higher Price," Econometrica, Econometric Society, vol. 48(6), pages 1575-1579, September.
    7. Roger Waldeck & Eric Darmon, 2006. "Can boundedly rational sellers learn to play Nash?," Post-Print hal-02312212, HAL.
    8. Darmon, Eric & Waldeck, Roger, 2006. "Nash versus Reinforcement Learning on a Search Market Some Similarities and Differences between Individual and Social Learning," European Journal of Economic and Social Systems, Lavoisier, vol. 19(2), pages 269-294.
    9. Michael R. Baye & John Morgan, 2001. "Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets," American Economic Review, American Economic Association, vol. 91(3), pages 454-474, June.
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    11. Kohn, Meir G. & Shavell, Steven, 1974. "The theory of search," Journal of Economic Theory, Elsevier, vol. 9(2), pages 93-123, October.
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    13. Janssen, Maarten C.W. & Moraga-Gonzalez, Jose Luis & Wildenbeest, Matthijs R., 2005. "Truly costly sequential search and oligopolistic pricing," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 451-466, June.
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    Cited by:

    1. Manfred Nermuth & Giacomo Pasini & Paolo Pin & Simon Weidenholzer, 2009. "Price Dispersion, Search Externalities, and the Digital Divide," Vienna Economics Papers vie0916, University of Vienna, Department of Economics.
    2. Maarten C.W. Janssen & Alexei Parakhonyak, 2011. "Consumer Search Markets with Costly Second Visits," Vienna Economics Papers 1102, University of Vienna, Department of Economics.
    3. Anania, Giovanni & Nistico, Rosanna, 2012. "Price dispersion, search costs and consumers and sellers heterogeneity in retail food markets," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125594, International Association of Agricultural Economists.
    4. Nermuth, Manfred & Pasini, Giacomo & Pin, Paolo & Weidenholzer, Simon, 2013. "The informational divide," Games and Economic Behavior, Elsevier, vol. 78(C), pages 21-30.
    5. Daniel E. Chavez & Marco A. Palma, 2019. "Pushing subjects beyond rationality with more alternatives in experimental auctions," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 207-217, March.
    6. Anania, Giovanni & Nisticò, Rosanna, 2014. "Price dispersion and seller heterogeneity in retail food markets," Food Policy, Elsevier, vol. 44(C), pages 190-201.
    7. Bernd Jost, 2012. "Price Dispersion, Search Costs and Spatial Competition: Evidence from the Austrian Retail Gasoline Market," NEURUS papers neurusp166, NEURUS - Network of European and US Regional and Urban Studies.

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