Abstract

http://ssrn.com/abstract=1674376
 


 



Nonsequential Search Equilibrium with Search Cost Heterogeneity


José Luis Moraga-González


University of Navarra, IESE Business School; University of Groningen

Zsolt Sandor


University of Groningen

Matthijs R. Wildenbeest


Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

July 1, 2010

IESE Business School Working Paper No. 869

Abstract:     
We generalize the model of Burdett and Judd (1983) to the case where an arbitrary finite number of firms sells a homogeneous good to buyers who have heterogeneous search costs. We show that a price dispersed symmetric Nash equilibrium always exists. Numerical results show that the behavior of prices with respect to the number of firms hinges upon the shape of the search cost distribution: when search costs are relatively concentrated (dispersed), entry of firms leads to higher (lower) average prices.

Number of Pages in PDF File: 20

Keywords: nonsequential search, oligopoly, arbitrary search cost distributions

JEL Classification: D43, C72

working papers series


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Date posted: September 10, 2010  

Suggested Citation

Moraga-González, José Luis and Sandor, Zsolt and Wildenbeest, Matthijs R., Nonsequential Search Equilibrium with Search Cost Heterogeneity (July 1, 2010). IESE Business School Working Paper No. 869. Available at SSRN: http://ssrn.com/abstract=1674376 or http://dx.doi.org/10.2139/ssrn.1674376

Contact Information

José Luis Moraga-González (Contact Author)
University of Navarra, IESE Business School ( email )
Avenida Pearson 21
Barcelona, 08034
Spain
University of Groningen
P.O. Box 800
9700 AV Groningen
Netherlands
Zsolt Sandor
University of Groningen ( email )
P.O. Box 800
9700 AH Groningen
Netherlands
Matthijs R. Wildenbeest
Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )
Bloomington, IN 47405
United States
812-856-5067 (Phone)
812-855-3354 (Fax)
HOME PAGE: http://www.kelley.iu.edu/mwildenb

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