An Equilibrium Search Model of Synchronized Sales

James Albrecht, Fabien Postel-Vinay and Susan Vroman

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Abstract: We demonstrate the existence of periodic nonstationary equilibria with self-generating cycles in a simple model of random search. Our results provide a theory of synchronized sales based on product market search by heterogeneous consumers. That is, our model explains how it can be optimal for all sellers to follow a repeated pattern of posting a high price for several periods and then posting a low price for one period.

Date: 2013-05
Note: View the original document on HAL open archive server: https://hal.science/hal-03384683v1
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Published in International Economic Review, 2013, 54 (2), pp.473 - 493. ⟨10.1111/iere.12003⟩

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Related works:
Journal Article: AN EQUILIBRIUM SEARCH MODEL OF SYNCHRONIZED SALES (2013)
Working Paper: An Equilibrium Search Model of Synchronized Sales (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-03384683

DOI: 10.1111/iere.12003

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