A Model of Search and Shopping by Homogeneous Customers without Price Precommitment by Firms

Andrew Daughety

Journal of Economics & Management Strategy, 1992, vol. 1, issue 3, 455-73

Abstract: Price setting by firms and search by customers is analyzed, relaxing two basic attributes of most search models: price precommitment and agent heterogeneity. Customers are characterized by individual demand functions for a homogeneous good and can choose to employ a threat to search. Firms noncooperatively make pricing decisions by using the individual demand curves under conditions of constant marginal cost. Firms adopt pricing rules that optimally respond to customer search histories. Bargaining power is endogenously assigned. Firms know their common marginal cost; customers, the cost distribution. The unique separating equilibrium is characterized by a lumpy distribution of prices and by heterogeneous shopping behavior by customers giving rise to "shoppers" and "nonshoppers." Copyright 1992 by MIT Press.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: A MODEL OF SEARCH AND SHOPPING BY HOMOGENEOUS CUSTOMERS WITHOUT PRICE PRECOMMITMENT BY FIRMS (1992)
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:bla:jemstr:v:1:y:1992:i:3:p:455-73

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=1058-6407&site=1

Access Statistics for this article

More articles in Journal of Economics & Management Strategy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().