Limited Memory Consumers and Price Dispersion

Levent Kutlu

Review of Industrial Organization, 2015, vol. 46, issue 4, 349-357

Abstract: We examine the effects of limited consumer memory on the pricing strategies of competing firms. We show that when the valuations of consumers are heterogeneous, it is possible to observe price dispersion even when each firm charges a single price. Copyright Springer Science+Business Media New York 2015

Keywords: Bounded rationality; Categorization; Limited memory; Price dispersion (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s11151-015-9452-5

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