A Comment on 'Price Dispersion, Inflation, and Welfare' by a. Head and a. Kumar

6 Pages Posted: 5 May 2005

See all articles by Dale T. Mortensen

Dale T. Mortensen

Northwestern University - Department of Economics; IZA Institute of Labor Economics

Abstract

The principal results of Head and Kumar's article are derived under the natural assumption that the number of price offers received per period by buyers is distributed Poisson. This case is of interest for two reasons. First, because the infinite sums and integrals that enter the equilibrium conditions can be solved in closed form, the derivations of the model's implications are straightforward. Second, by regarding the arrival rate as the relevant measure of search intensity, the analysis of endogenous search effort is simplified.

Suggested Citation

Mortensen, Dale T., A Comment on 'Price Dispersion, Inflation, and Welfare' by a. Head and a. Kumar. Available at SSRN: https://ssrn.com/abstract=714276

Dale T. Mortensen (Contact Author)

Northwestern University - Department of Economics ( email )

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IZA Institute of Labor Economics

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