Multiplicity of Equilibria in Search Markets with Free Entry and Exit

Pedro Pereira

No 3, Working Papers from Portuguese Competition Authority

Abstract: In this paper I identify an instance of multiplicity of equilibria, in search markets with production cost heterogeneity. I show that if firms may enter or exit the market, there may be multiple equilibria. I provide a monotonicity property, which is necessary and sufficient for uniqueness. Multiplicity vanishes as the search cost gets small. Multiple equilibria can be ranked by welfare.

Keywords: Search; Multiplicity of Equilibria; Coordination Failure (search for similar items in EconPapers)
JEL-codes: D43 D83 L13 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2004-11
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Related works:
Journal Article: Multiplicity of equilibria in search markets with free entry and exit (2005)
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