Oligopolistic markets with sequential search and production cost uncertainty

• 成果类型: Article
• 署名作者: Janssen, Maarten; Pichler, Paul; Weidenholzer, Simon
• 署名单位: University of Vienna; HSE University (National Research University Higher School of Economics); University of Essex
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/j.1756-2171.2011.00144
• 发表日期: 2011
• 页码: 444-470
• 关键词: equilibrium price dispersion; consumer search; MODEL; COMPETITION; adjustment; internet

摘要

This article analyzes a sequential search model where firms face identical but stochastic production costs, the realizations of which are unknown to consumers. We characterize a perfect Bayesian equilibrium satisfying a reservation price property and provide a sufficient condition for such an equilibrium to exist. We show that (i) firms set on average higher prices and make larger profits compared to the scenario where consumers observe production costs, (ii) expected prices and consumer welfare can be non-monotonic in the number of firms, and (iii) the impact of production cost uncertainty vanishes as the number of firms becomes very large.