Ordered Search in Differentiated Markets

Zhou, Jidong (2009): Ordered Search in Differentiated Markets.

Abstract

This paper presents an ordered search model in which consumers search both for price and product fitness. We show that there is price dispersion in equilibrium and prices rise in the order of search. The top firms in consumer search order, though charge lower prices, earn higher profits due to their larger market shares.

• Item Type: MPRA Paper
• Language: English
• Keywords: non-random search, price dispersion, product differentiation
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search ; Learning ; Information and Knowledge ; Communication ; Belief ; Unawareness; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection

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