Equilibrium Price Dispersion Across and Within Stores

Guido Menzio and Nicholas Trachter

No 15-1, Working Paper from Federal Reserve Bank of Richmond

Abstract: 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 induces 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.

JEL-codes: D43 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2015-01-15
New Economics Papers: this item is included in nep-com, nep-dge, nep-mic and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Related works:
Journal Article: Equilibrium Price Dispersion Across and Within Stores (2018)
Working Paper: Equilibrium Price Dispersion Across and Within Stores (2015)
Working Paper: Equilibrium Price Dispersion Across and Within Stores (2015)
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