Duopolistic Competition in Search Markets

Roman Inderst and Christian Pfeil
Additional contact information
Christian Pfeil: University of Saarland, Postal: L 13, 15, D-68131 Mannheim

No 98-37, Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim, Sonderforschungsbereich 504, University of Mannheim

Abstract: We analyze a model of duopolistic competition in a search market, where firms compete by choosing prices and the number of outlets, while consumers are ignorant about the individual locations. The degree of price transparency prevailing in the market is modeled by the fraction of consumers who can observe price changes by both firms. Firms compete in two stages by first determining the number of outlets and then engaging in simultaneous price competition. We analyze a particular case with a uniform distribution of buyers' search costs to show that in oligopolistic search markets price competition need not increase with higher price transparency. Instead, firms may reduce their outlet numbers sufficiently.

Pages: 23 pages
Date: 1998-10-15
Note: Financial Support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged. We also thank seminar participants at FU Berlin, University of Saarland, and Humboldt University Berlin (ESEM '98).
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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: https://EconPapers.repec.org/RePEc:xrs:sfbmaa:98-37

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim Contact information at EDIRC., Sonderforschungsbereich 504, University of Mannheim
Bibliographic data for series maintained by Carsten Schmidt ( this e-mail address is bad, please contact ).