Can price dispersion be supported solely by information frictions?

José Tudón ()
Additional contact information
José Tudón: ITAM

Economic Theory Bulletin, 2021, vol. 9, issue 1, No 8, 75-90

Abstract: Abstract Even with identical consumers and identical firms, if firms set prices in a first stage, and if consumers search sequentially in a second stage, price dispersion arises in the form of a mixed-strategy Nash equilibrium. One only needs to assume consumers know the realized price distribution and that they do not know which firm has what price. In contrast to Burdett and Judd (1983), price quotes are not required to be “noisy.” Moreover, actual search is predicted to be nontrivial.

Keywords: Price dispersion; Information frictions; Sequential search; L13; D83; D21 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s40505-020-00196-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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:spr:etbull:v:9:y:2021:i:1:d:10.1007_s40505-020-00196-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40505

DOI: 10.1007/s40505-020-00196-3

Access Statistics for this article

Economic Theory Bulletin is currently edited by Nicholas C. Yannelis

More articles in Economic Theory Bulletin from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().