Multi Product Market Equilibrium with Sequential Search

Pedro Vieira

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: In this paper I investigate whether, in market equilibrium, one observes price dispersion and search when buyers intend to acquire several products whose price is unknown and exists a positive search cost. Although that seems fruitful, I prove that in market equilibrium it is not observed neither price dispersion nor search and shops act as if they where monopolists. Nevertheless, there is one property of the theory that is in accordance with empirical data, namely the continuous increase in the number and dimension of larger shops.

Keywords: Search; Price Dispersion; Market Equilibrium; Multi-products (search for similar items in EconPapers)
JEL-codes: D8 L1 (search for similar items in EconPapers)
Pages: 11 pages.
Date: 2005-02
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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:166

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