Models Of Imperfect Information And Equilibrium Price Dispersion
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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.
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.
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.
Imperfect Information In Markets With Few Competitors
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Author : Paolo G. Garella
language : en
Publisher:
Release Date : 1986
Imperfect Information In Markets With Few Competitors written by Paolo G. Garella and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1986 with Competition categories.
Equilibrium Price Dispersion Across And Within Stores
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Author : Guido Menzio
language : en
Publisher:
Release Date : 2015
Equilibrium Price Dispersion Across And Within Stores written by Guido Menzio 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 goods categories.
We develop a search-theoretic model of the product market that generates price dispersion across and within stores. Buyers differ with respect to their ability to shop around, both at different stores and at different times. The fact that some buyers can shop from only one seller while others can shop from multiple sellers causes price dispersion across stores. The fact that the buyers who can shop from multiple sellers are more likely to be able to shop at inconvenient times (e.g., on Monday morning) causes price dispersion within stores. Specifically, it causes sellers to post different prices for the same good at different times in order to discriminate between different types of buyers.
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.
The Economics Of Imperfect Information
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Author : Louis Phlips
language : en
Publisher: Cambridge University Press
Release Date : 1988
The Economics Of Imperfect Information written by Louis Phlips and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 1988 with Business & Economics categories.
This book provides a systematic presentation of new microeconomic theories of imperfect information.
Random Liquidity Price Dispersion And Inflation
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Author : Chaim Fershtman
language : en
Publisher:
Release Date : 1991
Random Liquidity Price Dispersion And Inflation written by Chaim Fershtman and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991 with Equilibrium (Economics) categories.
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.