Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/233343 
Year of Publication: 
2019
Series/Report no.: 
Discussion paper No. 128
Publisher: 
Aboa Centre for Economics (ACE), Turku
Abstract: 
I examine a rational expectations model of buyers and capacity con-strained sellers, where traders can choose between a cluster and a searchmarket. Sellers choose a market and post a price, and then buyerschoose which market to visit. There is a pure strategy equilibriumwhere all agents are in the cluster. There are also two continua ofmixed strategy equilibria. In a low-price equilibrium the cluster fea-tures overdemand, and in the high-price equilibrium the cluster fea-tures oversupply. The result differs sharply from a model where de-mand is stochastic and realizes after sellers have made their choices.
Subjects: 
matching
clustering
JEL: 
C78
D40
L11
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.