Coles, Melvyn G and Eeckhout, Jan (2003) Indeterminacy and directed search. Journal of Economic Theory, 111 (2). pp. 265-276. DOI https://doi.org/10.1016/s0022-0531(03)00086-3
Coles, Melvyn G and Eeckhout, Jan (2003) Indeterminacy and directed search. Journal of Economic Theory, 111 (2). pp. 265-276. DOI https://doi.org/10.1016/s0022-0531(03)00086-3
Coles, Melvyn G and Eeckhout, Jan (2003) Indeterminacy and directed search. Journal of Economic Theory, 111 (2). pp. 265-276. DOI https://doi.org/10.1016/s0022-0531(03)00086-3
Abstract
The directed search approach assumes each seller posts a fixed price and, ex post, randomly allocates the good should more than one buyer desire the good. This paper assumes sellers can post prices which are contingent on ex post realized demand; e.g. an advertisement might state the Bertrand price should there be more than one buyer, which corresponds to an auction outcome. Competition in fixed prices and ex post rationing describes equilibrium behavior. There is also real market indeterminacy: a continuum of equilibria exists which are not payoff equivalent. Sellers prefer the equilibrium in auctions. © 2003 Elsevier Science (USA). All rights reserved.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | indeterminacy; directed search |
| Subjects: | H Social Sciences > HB Economic Theory |
| Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
| SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
| Depositing User: | Unnamed user with email elements@essex.ac.uk |
| Date Deposited: | 04 Jan 2013 12:42 |
| Last Modified: | 30 Oct 2024 19:37 |
| URI: | http://repository.essex.ac.uk/id/eprint/4883 |