DIRECTED SEARCH AND THE BERTRAND PARADOX

• 成果类型: Article
• 署名作者: Geromichalos, Athanasios
• 署名单位: University of California System; University of California Davis
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12082
• 发表日期: 2014
• 页码: 1043-1065
• 关键词: capacity constraints; wage dispersion; COMPETITION; unemployment; equilibrium

摘要

I study a directed search model of oligopolistic competition, extended to incorporate general capacity constraints, congestion effects, and pricing based on ex post demand. In the presence of any one of these ingredients, the Bertrand paradox fails to hold. Hence, despite the emphasis that has been placed by the literature on sellers' capacity constraints as a resolution to the paradox, the existence of such constraints is only a subcase of a general class of environments where the paradox fails. Specifically, Bertrand's paradox will not arise whenever the buyers' expected utility from visiting a seller is decreasing in that seller's realized demand.