Too much waste, not enough rationing: The failure of stochastic, competitive markets

• 成果类型: Article
• 署名作者: de Meza, David; Reito, Francesco
• 署名单位: University of London; London School Economics & Political Science; University of Catania
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2020.105067
• 发表日期: 2020
• 关键词: Stochastic demand; rationing; waste; EFFICIENCY

摘要

There are good reasons why sellers often post prices before the realization of demand shocks. We study whether equilibrium prices chosen ex ante coincide with the ex-ante prices that maximize expected aggregate surplus. The main result is that even in the competitive limit there is a divergence. Waste is excessive and entry decisions are distorted. The problem is that for competitive firms to sell in low-demand states involves a costly sacrifice of high-state revenue. (C) 2020 Elsevier Inc. All rights reserved.