The Double Diamond Paradox

• 成果类型: Article
• 署名作者: Garcia, Daniel; Honda, Jun; Janssen, Maarten
• 署名单位: University of Vienna; Goethe University Frankfurt
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20150299
• 发表日期: 2017
• 页码: 63-99
• 关键词: price-discrimination; consumer search; pass-through; MODEL; sales; COMPETITION; INFORMATION; industry; banking

摘要

We study vertical relations in markets with consumer and retailer search. We obtain three important new results. First, we provide a novel explanation for price dispersion that does not depend on some form of heterogeneity among consumers. Price dispersion takes on the form of a bimodal distribution. Second, under competitive conditions (many retailers or small consumer search cost), social welfare is significantly smaller than in the double marginalization outcome. Manufacturers' regular price is significantly above the monopoly price, squeezing retailers' markups and providing an alternative explanation for incomplete cost pass-through. Third, firms' prices are decreasing in consumer search cost.