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Multi Product Market Equilibrium with Sequential Search

Author

Listed:
  • Pedro Cosme Costa Vieira

    (Faculdade de Economia, Universidade do do Porto)

Abstract
In this paper I investigate whether, in market equilibrium, one observes price dispersion and search when buyers intend to acquire several products whose price is unknown and exists a positive search cost. Although that seems fruitful, I prove that in market equilibrium it is not observed neither price dispersion nor search and shops act as if they where monopolists. Nevertheless, there is one property of the theory that is in accordance with empirical data, namely the continuous increase in the number and dimension of larger shops.

Suggested Citation

  • Pedro Cosme Costa Vieira, 2005. "Multi Product Market Equilibrium with Sequential Search," FEP Working Papers 166, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:166
    as

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    File URL: http://www.fep.up.pt/investigacao/workingpapers/05.02.07_WP166_pedro.pdf
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    References listed on IDEAS

    as
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    13. Pedro Cosme da Costa Vieira, 2003. "The Impact of Monetary Shocks on Product and Wages: A neoclassical aggregated dynamic model," FEP Working Papers 132, Universidade do Porto, Faculdade de Economia do Porto.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Search; Price Dispersion; Market Equilibrium; Multi-products;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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