Publications
Detailed Information
Multiple Equilibria in a Simple Model of Search with Entry
Cited 0 time in
Web of Science
Cited 0 time in Scopus
- Authors
- Issue Date
- 2006-07
- Citation
- Seoul Journal of Economics, Vol.19 No.3, pp. 329-342
- Keywords
- search ; maket entry ; multople equilibria
- Abstract
- Diamond (1971) analyzed a goods market wherein identical buyers with unitary demand searched sequentially over identical monopolistically competitive firms. The equilibrium market price was shown to be the monopoly price. Suppose, now, that to participate in a "Diamond-market," prospective buyers are charged a small but positive entry fee. Since the market price fully extracts consumer surplus from entering buyers. no one finds it worthwhile to pay this entry fee. To study the non-trivial implications of consumer entry, I modify the Diamond-model slightly. The modified model displays two interesting features: buyers with strictly positive entry fees enter the goods market, and the goods market generates multiple equilibrium prices.
- ISSN
- 1225-0279
- Language
- English
- Files in This Item:
Item View & Download Count
Items in S-Space are protected by copyright, with all rights reserved, unless otherwise indicated.