Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86499
Authors: 
Janssen, Maarten C.W.
Moraga-Gonzalez, Jose Luis
Wildenbeest, Matthijs R.
Year of Publication: 
2004
Series/Report no.: 
Tinbergen Institute Discussion Paper 04-071/1
Abstract: 
This paper presents an empirical examination of oligopoly pricingand consumer search. The theoretical model allows for sequential andnon-sequential search and using the theoretical restrictions firm andconsumer behavior impose on the data we study the empirical validity of themodels. Two equilibria arise: one with costless search and the other withcostly search. We find that the costless search equilibrium works well forproducts with a relatively low value, and, by implication, a small number ofsellers. By contrast, the costly search equilibrium explains the observeddata in a manner that is consistent with the underlying theoretical modelfor almost all products (for 86 out of 87!).
Subjects: 
consumer search
oligopoly
price dispersion
maximum likelihood estimation
JEL: 
C13
D40
L13
Document Type: 
Working Paper

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