Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

Costly Search, Capacity Constraints, and Bertrand Equilibrium Price Dispersion

Michael A. Arnold
International Economic Review
Vol. 41, No. 1 (Feb., 2000), pp. 117-131
Stable URL: http://www.jstor.org/stable/2648825
Page Count: 15
  • Read Online (Free)
  • Download ($39.00)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Costly Search, Capacity Constraints, and Bertrand Equilibrium Price Dispersion
Preview not available

Abstract

This article analyzes the impact of transaction (search) costs and capacity constraints in an almost competitive market with homogeneous firms that compete on price. We characterize conditions under which Nash equilibria with price dispersion exist; in equilibrium, firms play pure strategies in prices and consumers adopt a symmetric mixed search strategy. Price dispersion is possible even though consumers all have the same search cost and valuation for the item and prices charged by all firms are common knowledge.

Page Thumbnails

  • Thumbnail: Page 
117
    117
  • Thumbnail: Page 
118
    118
  • Thumbnail: Page 
119
    119
  • Thumbnail: Page 
120
    120
  • Thumbnail: Page 
121
    121
  • Thumbnail: Page 
122
    122
  • Thumbnail: Page 
123
    123
  • Thumbnail: Page 
124
    124
  • Thumbnail: Page 
125
    125
  • Thumbnail: Page 
126
    126
  • Thumbnail: Page 
127
    127
  • Thumbnail: Page 
128
    128
  • Thumbnail: Page 
129
    129
  • Thumbnail: Page 
130
    130
  • Thumbnail: Page 
131
    131