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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/18930
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| Title: | | Consumer search and oligopolistic pricing : an empirical investigation  |
| Authors: | | Janssen, Maarten C. W. Moraga-González, José Luis Wildenbeest, Matthijs R. |
| Issue Date: | | 2004 |
| Series/Report no.: | | CESifo working papers 1292 |
| Abstract: | | This paper presents an empirical examination of oligopoly pricing and consumer search. The theoretical model allows for sequential and non-sequential search and, using the theoretical restrictions firm and consumer behavior impose on the data, we study the empirical validity of the models. Two equilibria arise: one with costless search and the other with costly search. We find that the costless search equilibrium works well for products with a relatively low value, and, by implication, a small number of sellers. By contrast, the costly search equilibrium explains the observed data in a manner that is consistent with the underlying theoretical model for almost all products (for 86 out of 87!). |
| Subjects: | | consumer search oligopoly price dispersion maximum likelihood estimation |
| JEL: | | D83 D40 L13 C13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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