Equilibrium Price Dispersion Across and Within Stores / Guido Menzio, Nicholas Trachter.

By:

Menzio, Guido

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w21493.Publication details: Cambridge, Mass. National Bureau of Economic Research 2015.Description: 1 online resource: illustrations (black and white)Subject(s):

D43 - Oligopoly and Other Forms of Market Imperfection

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Abstract: We develop a search-theoretic model of the product market that generates price dispersion across and within stores. Buyers differ with respect to their ability to shop around, both at different stores and at different times. The fact that some buyers can shop from only one seller while others can shop from multiple sellers causes price dispersion across stores. The fact that the buyers who can shop from multiple sellers are more likely to be able to shop at inconvenient times (e.g., on Monday morning) causes price dispersion within stores. Specifically, it causes sellers to post different prices for the same good at different times in order to discriminate between different types of buyers.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w21493 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w21490 Scraped Data and Sticky Prices /	nber w21491 The Pricing of Short-Term market Risk: Evidence from Weekly Options /	nber w21492 Fiscal Rules and Discretion in a World Economy /	nber w21493 Equilibrium Price Dispersion Across and Within Stores /	nber w21494 Double Liability at Early American Banks /	nber w21495 Efficiency and Information Transmission in Bilateral Trading /	nber w21496 Peer-to-Peer Markets /	Next

August 2015.

We develop a search-theoretic model of the product market that generates price dispersion across and within stores. Buyers differ with respect to their ability to shop around, both at different stores and at different times. The fact that some buyers can shop from only one seller while others can shop from multiple sellers causes price dispersion across stores. The fact that the buyers who can shop from multiple sellers are more likely to be able to shop at inconvenient times (e.g., on Monday morning) causes price dispersion within stores. Specifically, it causes sellers to post different prices for the same good at different times in order to discriminate between different types of buyers.