Macro shocks cause equilibrium price dispersion

David de Meza and Francesco Reito

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Price dispersion is shown to arise when demand is stochastic, ex-ante identical competitive firms set price prior to the realization of uncertainty and ex-ante identical buyers cannot switch sellers if rationed.

Keywords: stochastic demand; price dispersion; rationing; waster (search for similar items in EconPapers)
JEL-codes: D61 D81 H23 (search for similar items in EconPapers)
Pages: 4 pages
Date: 2021-11-01
New Economics Papers: this item is included in nep-ger and nep-mic
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Published in Economics Letters, 1, November, 2021, 208. ISSN: 0165-1765

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http://eprints.lse.ac.uk/111897/ Open access version. (application/pdf)

Related works:
Journal Article: Macro shocks cause equilibrium price dispersion (2021)
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