Janssen, Maarten and Pichler, Paul and Weidenholzer, Simon (2011) 'Oligopolistic markets with sequential search and production cost uncertainty.' The RAND Journal of Economics, 42 (3). pp. 444-470. ISSN 0741-6261
Full text not available from this repository.Abstract
This article analyzes a sequential search model where firms face identical but stochastic production costs, the realizations of which are unknown to consumers. We characterize a perfect Bayesian equilibrium satisfying a reservation price property and provide a sufficient condition for such an equilibrium to exist. We show that (i) firms set on average higher prices and make larger profits compared to the scenario where consumers observe production costs, (ii) expected prices and consumer welfare can be non-monotonic in the number of firms, and (iii) the impact of production cost uncertainty vanishes as the number of firms becomes very large. © 2011, RAND.
Item Type: | Article |
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Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Elements |
Depositing User: | Elements |
Date Deposited: | 27 Jun 2012 15:12 |
Last Modified: | 15 Jan 2022 00:36 |
URI: | http://repository.essex.ac.uk/id/eprint/2626 |
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