 A model of sales with a large number of sellersEvangelos Rouskas Mathematical Social Sciences, 2020, vol. 104, issue C, 68-70 Abstract: In this paper, I propose a model that can support Varian’s (Varian, 1980) equilibrium search behavior with an arbitrarily large number of sellers, even when the first price observation is costly for the consumers with positive search costs and the search is endogenous. In my model, the consumers with zero search costs have the same low valuation for all sellers’ products, whereas the consumers with positive search costs (i) learn the price and their valuation for the product of each seller after engaging in costly search for the corresponding seller; and (ii) in the pre-search phase, anticipate that the valuation for the product of each seller is high with strictly positive and lower than unity exogenous probability and low with the remaining probability. Conditional on that some reasonable restrictions on the parameters are satisfied, although the number of sellers may grow arbitrarily large, the expected price is bounded above by the low valuation, and the consumers with positive search costs find it most profitable to search once. Keywords: Sales; Large number of sellers; Search; Consumer heterogeneity (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:matsoc:v:104:y:2020:i:c:p:68-70 DOI: 10.1016/j.mathsocsci.2020.02.002 Access Statistics for this article Mathematical Social Sciences is currently edited by J.-F. Laslier More articles in Mathematical Social Sciences from Elsevier |
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