An Equilibrium Search Model of Synchronized Sales
James Albrecht (),
Fabien Postel-Vinay () and
Susan Vroman ()
Sciences Po publications from Sciences Po
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.
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Published in International Economic Review, 2013, vol. 54, pp.473-493
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Journal Article: AN EQUILIBRIUM SEARCH MODEL OF SYNCHRONIZED SALES (2013)
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