Information And Price Dispersion
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Information And Price Dispersion
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Author : Dieter Pennerstorfer
language : en
Publisher:
Release Date : 2020
Information And Price Dispersion written by Dieter Pennerstorfer and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
Limited information is the key element generating price dispersion in models of homogeneous-goods markets. We show that the global relationship between information and price dispersion is an inverse-U shape. We test this mechanism for the retail gasoline market using a new measure of information based on commuter data from Austria. Commuters sample gasoline prices on their commuting route, providing us with spatial variation in the share of informed consumers. Our empirical estimates are in line with the theoretical predictions. We also quantify how information affects average prices paid and the distribution of surplus in the gasoline market.
Price Dispersion And Consumers Search Under Imperfect Information
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Author : Chiaen John Wu
language : en
Publisher:
Release Date : 1992
Price Dispersion And Consumers Search Under Imperfect Information written by Chiaen John Wu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1992 with Consumers' preferences categories.
Online Price Dispersion And The Role Of Information
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Author : Neveen I. Farag
language : en
Publisher:
Release Date : 2002
Online Price Dispersion And The Role Of Information written by Neveen I. Farag and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with categories.
Bargains And Rip Offs
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Author : Dennis Eggert
language : en
Publisher: GRIN Verlag
Release Date : 2007-09
Bargains And Rip Offs written by Dennis Eggert and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-09 with Business & Economics categories.
Seminar paper from the year 2006 in the subject Economics - Industrial Economics, grade: 1,0, Helsinki School of Economics, course: Industrial Organisation, 18 entries in the bibliography, language: English, abstract: The main issue in the article is the derivation of a model in which prices can differ in equilibrium, even though the goods are homogeneous and there is asymmetric information in the market. The reason for this price dispersion is caused by consumer heterogeneity. Salop and Stiglitz explain, that "because of differences in preference or ability, some agents perform much better than others in market decisions." To model this kind of heterogeneity they assign different costs of gathering certain information to the consumers. For simplicity they part the consumers in two groups: The first one consists of low-cost information gatherer and the other group has higher cost to gain complete information. For further simplicity there are just two levels of information: to be completely informed or to be not informed at all. Furthermore the costs to become an informed consumer are fixed. The differences in information in this model regard the locations of the shops. All consumers know about all prices that are in the market, they just do not know where the shop with a certain (the lowest) price is. The shops on the other hand have complete information about the market. They know about the differences between the consumers and can compute the demand that will occur, when they ask a certain price. So they face a trade-off between higher prices and lower demand. It is important to state why there is a possibility of raising the price and not to loose all demand like it would be in a perfect market. When the rise in price is not too high, it does not pay for the high-cost information gatherer to become completely informed. Their expected loss by buying randomly either in low- or high-priced shops is lower than the fixed cost of gathering the information. All toget
Bargains And Rip Offs A Model Of Monopolistic Competitive Price Dispersion
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Author : Dennis Eggert
language : en
Publisher: GRIN Verlag
Release Date : 2007-06-26
Bargains And Rip Offs A Model Of Monopolistic Competitive Price Dispersion written by Dennis Eggert and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-06-26 with Business & Economics categories.
Seminar paper from the year 2006 in the subject Economics - Industrial Economics, grade: 1,0, Helsinki School of Economics, course: Industrial Organisation, language: English, abstract: The main issue in the article is the derivation of a model in which prices can differ in equilibrium, even though the goods are homogeneous and there is asymmetric information in the market. The reason for this price dispersion is caused by consumer heterogeneity. Salop and Stiglitz explain, that “because of differences in preference or ability, some agents perform much better than others in market decisions.” To model this kind of heterogeneity they assign different costs of gathering certain information to the consumers. For simplicity they part the consumers in two groups: The first one consists of low-cost information gatherer and the other group has higher cost to gain complete information. For further simplicity there are just two levels of information: to be completely informed or to be not informed at all. Furthermore the costs to become an informed consumer are fixed. The differences in information in this model regard the locations of the shops. All consumers know about all prices that are in the market, they just do not know where the shop with a certain (the lowest) price is. The shops on the other hand have complete information about the market. They know about the differences between the consumers and can compute the demand that will occur, when they ask a certain price. So they face a trade-off between higher prices and lower demand. It is important to state why there is a possibility of raising the price and not to loose all demand like it would be in a perfect market. When the rise in price is not too high, it does not pay for the high-cost information gatherer to become completely informed. Their expected loss by buying randomly either in low- or high-priced shops is lower than the fixed cost of gathering the information. All together this consumer heterogeneity and the fully informed shops can lead to price dispersion in equilibrium, even though the goods are homogeneous and there is the difference in information between the actors.
Models Of Imperfect Information And Equilibrium Price Dispersion
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Author : Kirke B. Lawton
language : en
Publisher:
Release Date : 1989
Models Of Imperfect Information And Equilibrium Price Dispersion written by Kirke B. Lawton and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1989 with categories.
Price Dispersion Information And Learning
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Author : Luis F. Araujo
language : en
Publisher:
Release Date : 2004
Price Dispersion Information And Learning written by Luis F. Araujo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with categories.
We consider an economy where trade is decentralized and agents have incomplete information with respect to the value of money. Agents' learning evolves from private experiences and we explore how the formation of prices interacts with learning. We show that multiple equilibria arise, and equilibria with price dispersion entail more learning than equilibria with one price. Price dispersion increases communication about private histories, which in turn increases the overall amount of information in the economy. We also compare welfare under price dispersion and one price. Our results show that, despite the existence of some meetings where no trade takes place, welfare under price dispersion may be higher than under one price.
Price Dispersion And Informational Frictions
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Author : Pierre Dubois
language : en
Publisher:
Release Date : 2015
Price Dispersion And Informational Frictions written by Pierre Dubois and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with Consumer behavior categories.
Traditional demand models assume that consumers are perfectly informed about product characteristics, including price. However, this assumption may be too strong. Unannounced sales are a common supermarket practice. As we show, retailers frequently change position in the price rankings, thus making it unlikely that consumers are aware of all deals offered in each period. Further empirical evidence on consumer behavior is also consistent with a model with price information frictions. We develop such a model for horizontally differentiated products and structurally estimate the search cost distribution. The results show that in equilibrium, consumers observe a very limited number of prices before making a purchase decision, which implies that imperfect information is indeed important and that local market power is potentially high. We also show that a full information demand model yields severely biased price elasticities.
Consumer Search And Dynamic Price Dispersion
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Author : Ambarish Chandra
language : en
Publisher:
Release Date : 2011
Consumer Search And Dynamic Price Dispersion written by Ambarish Chandra and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
This paper studies the role of imperfect information in explaining price dispersion. We use a new panel dataset on the U.S. retail gasoline industry, and propose a new test of temporal price dispersion to establish the importance of consumer search. We show that price rankings vary significantly over time; however, they are more stable among stations at the same street intersection. We establish the equilibrium relationships between price dispersion and key variables from consumer search models. Price dispersion increases with the number of firms in the market, decreases with the production cost and increases with search costs.
Price Dispersion In A Model Of Identical Agents With Perfect Information
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Author : Zhiqi Chen
language : en
Publisher:
Release Date : 2001
Price Dispersion In A Model Of Identical Agents With Perfect Information written by Zhiqi Chen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Pricing categories.