Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18930
Authors: 
Janssen, Maarten C. W.
Moraga-González, José Luis
Wildenbeest, Matthijs R.
Year of Publication: 
2004
Series/Report no.: 
CESifo Working Paper 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

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