Economics at your fingertips  

A more general model of price complexity

Ioana Chioveanu ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper considers a model of competition in prices and price complexity levels, which accommodates concave and convex confusion technologies. In symmetric equilibrium, the probability of using high complexity increases in the number of firms. In the limit, as the number of competitors goes to infinity, firms use high complexity almost surely but the impact on consumer welfare depends on the characteristics of the confusion technology. Specifically, industry profits converge to the highest level with concave confusion technologies and to the lowest level when with convex confusion technologies. An improvement in consumer sophistication increases consumer welfare but does not reduce market complexity.

Keywords: price complexity; confusion technology; oligopoly markets (search for similar items in EconPapers)
JEL-codes: L13 (search for similar items in EconPapers)
Date: 2018-06-18
New Economics Papers: this item is included in nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) original version (application/pdf)

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:

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

Page updated 2020-03-11
Handle: RePEc:pra:mprapa:87466