EconPapers    
Economics at your fingertips  
 

Discounts and Deadlines in Consumer Search

Dominic Coey, Bradley Larsen () and Brennan Platt

American Economic Review, 2020, vol. 110, issue 12, 3748-85

Abstract: We present a new equilibrium search model where consumers initially search among discount opportunities, but are willing to pay more as a deadline approaches, eventually turning to full-price sellers. The model predicts equilibrium price dispersion and rationalizes discount and full-price sellers coexisting without relying on ex ante heterogeneity. We apply the model to online retail sales via auctions and posted prices, where failed attempts to purchase reveal consumers' reservation prices. We find robust evidence supporting the theory. We quantify dynamic search frictions arising from deadlines and show how, with deadline-constrained buyers, seemingly neutral platform fee increases can cause large market shifts.

JEL-codes: D11 D44 D83 L81 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aer.20190460 (application/pdf)
https://doi.org/10.3886/E119387V2 (text/html)
https://www.aeaweb.org/doi/10.1257/aer.20190460.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/aer.20190460.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Discounts and Deadlines in Consumer Search (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:110:y:2020:i:12:p:3748-85

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/aer.20190460

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2022-08-16
Handle: RePEc:aea:aecrev:v:110:y:2020:i:12:p:3748-85