Dynamic Pricing with Search Frictions

Daniel Garcia

No 6765, CESifo Working Paper Series from CESifo

Abstract: We study markets for perishable goods with search frictions. Sellers have a single unit of a good and post prices in every period. Buyers engage in costly search to observe prices and match values. In equilibrium trade starts endogenously and the volume of trade increases over time. Under mild conditions, prices decrease at increasing rates over time. We derive the gains from trade in equilibrium as well as their distribution, and fully characterize the equilibrium for a class of demand functions in markets with evenly matched buyers and sellers. We finally discuss implications for market design, including cancellation policies.

Keywords: consumer search; dynamic pricing; sharing economy (search for similar items in EconPapers)
JEL-codes: D11 D83 L13 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp6765.pdf (application/pdf)

Related works:
Working Paper: Dynamic Pricing with Search Frictions (2017)
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:ces:ceswps:_6765

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().