Search theory of imperfect competition with decreasing returns to scale

• 成果类型: Article
• 署名作者: Menzio, Guido
• 署名单位: New York University; National Bureau of Economic Research; New York University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2024.105827
• 发表日期: 2024
• 关键词: Search frictions; imperfect competition; price dispersion

摘要

I study a version of the search -theoretic model of imperfect competition by Burdett and Judd (1983) in which sellers operate a production technology with decreasing rather than constant returns to scale. Equilibrium exists and is unique, and its structure depends on the extent of search frictions. If search frictions are large enough, the price distribution is non -degenerate and atomless. If search frictions are neither too large nor too small, the price distribution is non -degenerate with an atom at the lowest price. If search frictions are small enough, the price distribution is degenerate. Equilibrium is efficient if and only if the price distribution is degenerate. Generically, neither the structure nor the welfare properties of equilibrium are the same as in Burdett and Judd (1983). As in Burdett and Judd (1983), however, equilibrium outcomes span the spectrum from pure monopoly to perfect competition as search frictions decline.