hotel room rate pricing strategy for market share in oligopolistic competition eight year longitudinal study of super deluxe hotels in seoul abstract this paper examines pricing strategies and business performances of super deluxe hotels in seoul to achieve this purpose empirical research is conducted on the basis of data from 1989 when the formation of the present product life cycle stage and the market structure began to 1996 through quick cluster and regression analysis a separation of the price competition between groups of hotels is identified by anova pricing strategies and market shares of selected leading hotels are compared as a longitudinal study the same research design is applied based on four two year periods the final part of the paper evaluates the results of the statistical analysis and discusses important findings and implications of the four two year periods respectively

evaluating program evaluations new evidence on commonly used nonexperimental methods in this paper we follow previous research by using experimental data to assess the two nonexperimental evaluation approaches our data are from a series of social experiments conducted in several states during the 1980s to evaluate programs aimed at helping welfare recipients find jobs we simulate the two nonexperimental approaches by creating comparison groups from the true control groups and by comparing the resultant nonexperimental estimates of program effects with experimentally derived estimates of program effects although experimental data are required to provide an assessment of the nonexperimental approaches they are not required to create the comparison groups in practice thus our results have direct implications for choosing a nonexperimental evaluation strategy when an experiment is not feasible the remainder of this paper is organized as follows section i describes the social experiments and the various comparison groups created for the analysis section ii discusses the methods used to generate and assess the nonexperimental estimates section iii presents the empirical results and section iv offers some conclusions excerpt

discrete equilibrium price dispersion an explicit solution of an equilibrium model with price setting firms and searching customers makes possible a number of comparativestatics predictions about how cost differences among firms search costs of customers and taxes will affect the mean and variance of the distribution of market prices another implication of the model is that a firm s demand depends on the difference between its price and the average price in the market

the effects of firm optimizing behaviour in matching models this paper considers a matching model of which the search behaviour of jovanovic 1979 and albrecht and jovanovic 1984 are special cases the nature of the generality is that each unemployed worker has more information than firms about his average productivity this results in wage offers falling over the length of an unemployment spell because a long spell is a signal of lower than average productivity the results of the paper are similar to the scarring effect of heckman and borjas 1980 and greenwald 1986 and the discouraged worker effect of schweitzer and smith 1974

price matching in a model of equilibrium price dispersion some sellers announce openly to prospective buyers that they will match any competitor s lower price on similar products this practice is visible among many retailers of consumer durables such as tv sets stereo components cameras and personal computers in more covert and informal forms price matching is ubiquitous it exists whenever individual sellers of a product are known to be generally willing to lower their prices when confronted by prospective buyers who can demonstrate information of lower prices elsewhere attempts to demonstrate and verify such information usually constitute part of the haggling process one often wonders will prices consumers ultimately pay indeed be lower with such haggling will apparently aggressive price matching strategies result in lower or higher equilibrium prices this paper deals with an environment in which information is not perfect and buyers engage in costly sequential search it will be shown that with price matching prices ultimately charged to consumers are higher the crucial assumption here is that buyers marginal search cost increases with the number of searches already performed with this assumption the main idea driving our results is as follows in the presence of increasing marginal search cost price matching encourages search therefore there will be more prospective buyers who will have performed a larger number of searches their marginal search cost will be higher on the average thus firms will be able to take advantage of this and charge higher prices but why would price matching encourage search if marginal search cost is increasing the answer lies in that price matching implies costless recall in sequential search models with consumers facing a known price distribution and constant marginal search cost whether recall is costless or costly is immaterial for then consumers optimal strategy is a constant reservationprice strategy implying that prices rejected earlier will never be acceptable the desire to recall never arises so that it does not matter to the searcher whether recall is costly or costless in such an environment firms do not have the incentive to offer price matching but as rothschild 7 has cautioned us the two assumptions of costly and costless recall are not always interchangeable they are not when marginal search cost is increasing for then if a consumer having a price

testing models of consumer search using data on web browsing and purchasing behavior using a large data set on web browsing and purchasing behavior we test to what extent consumers are searching in accordance to various classical search models we nd that the benchmark model of sequential search with a known distributions of prices can be rejected based on the recall patterns we observe in the data moreover we show that even if consumers are initially unaware of the price distribution and have to learn the price distribution observed search behavior for given consumers over time is more consistent with non sequential search than sequential search with learning our

eco innovation and economic crisis a comparative analysis of environmental good practices and labour productivity in the spanish hotel industry abstract in recent years respect for the environment has been taken into account by tourists as a factor in their purchasing decisions the concept of eco innovation has gained an important role in adapting the tourism product to this new demand using a previous database already compiled by the authors this paper has two aims to address the effect of implementing environmental measures on labour productivity in the andalusian hotel industry and to show how its implementation has evolved during a period of deep economic crisis in all the productive sectors in spain 2008 2012 for this purpose the variable ei was defined as indicator by which to measure the eco innovation and was introduced in a standard cobb douglas production function the two estimates of the production function for 2008 and 2012 show that the introduction of eco innovative measures had a positive and significant influence on labour productivity despite the fact of the economic crisis reduced the productivity growth observed for each additional eco innovative practice implemented by the hotels from 8 15 in 2008 7 45 in 2012

the impact of wages and unemployment on youth enrollment and labor supply various aspects of the school enrollment labor supply decision have been examined in earlier studies including those of bowen and finegan 1969 cohen rea and lerman 1970 duncan 1965 katz 1973 korbel 1966 and lerman 1972 although these authors were aware of the joint nature of the school work decision typically they used an ordinary least squares ols framework with dichotomous dependent variables to analyze enrollment conditional on the labor supply decision or labor supply conditional on enrollment several more recent studies such as antos and mellow 1978 stephenson 1978 and ehrenberg and marcus forthcoming use multinomial logit to analyze the joint determination of labor supply and enrollment mallar 1976 uses a bivariate probit model to deal with the simultaneous relation between school and work but none of these studies considers both the wage offers and job availability there is still available no single set of estimates which considers the roles of both job availability and the wage on the joint enrollment labor supply decision consider what the interrelation between wages and job availability implies for estimation of the labor force participation school enrollment decision to the extent that downwardly rigid wages prevent the youth labor market from clearing one would expect both wages and job availability to influence labor supply if one of these measures is not included in explaining labor supply the coefficient estimated for the other measure may for reasons well known be biased for example if the wage is omitted but the unemployment variable included and if wages and unemployment are negatively correlated then the magnitude of the coefficient of the unemployment variable will be increased it is also unclear on a priori grounds how job availability affects school enrollment on the one hand if jobs are readily available to young people youth from poor families may be able to enroll in school supporting themselves through part time work with no jobs available some may be unable to afford school expenditures and may drop out bowen and finegan 1969 p 404 on the other hand readily available employment opportunities for youth may simply raise the probability of dropping out of school and working full time our findings will help to determine how young people react to this influence and to other influences of the market from the viewpoint of public policy there are a number of reasons why it is important that the enrollment labor supply decisions be understood and that the separate responses to wage and job availability be isolated for one thing there is a tendency to discount the welfare importance of unemployment or poor labor participation for young people enrolled in school feldstein and ellwood 1979 however the joint nature of the enrollment labor supply decisions suggests that a high enrollment rate may not be simply a cause of low participation rates but may be an additional symptom of adverse labor market conditions indeed our results for nonwhite males support an interpretation of this kind second the joint nature of the decisions also implies that public programs such as the received for publication january 31 1980 revision accepted for publication december 11 1980 both authors are with dartmouth college and the national bureau of economic research the research reported here was supported by the division of technical systems in the office of technical and analytic systems office of the assistant secretary for planning and budget u s department of education and is part of the nber s research program in labor studies any opinions expressed are those of the authors and not those of the national bureau of economic research or of the department of education we would like to thank gary fields meir kohn robert plotnick martin segal and participants in the labor seminars at harvard and at cornell for their helpful comments

the impact of demand and price expectations on the behavior of prices the effects of demand and price expectations on price behavior are analyzed using data from the manufacturing sector and a model formulated to pinpoint the demand oriented factors affecting prices and to incorporate price expectations as a direct influence on price behavior the expected normal demand is seen to have a strong and systemic influence on price behavior the expected normal level of new orders is found to be an adequate measure with sector data in general although some industries require more specification the effects of inventories and unfilled orders on prices are sporadic and across sectors and industries demand oriented forces are concluded to perform as well statistically as cost push determinants expectations concerning the current normal industry price level have a significant and consistent impact on price behavior this supports the idea that firms setting prices take into account their estimates of competitor s prices future price expectations appear to have little effect on current price information 15 references

price dispersion with directed search we model a market where identical buyers direct their search to identical capacity constrained sellers sellers cannot fully commit to the list price so strategic bargaining may determine the sale price we study search and pricing behavior in symmetric equilibrium sale prices exhibit equilibrium dispersion as they respond naturally to local demand conditions uncoordinated search decisions lead to equilibrium demand heterogeneity so sellers realizing large demand bargain prices up we characterize the sale price distribution parametrically studying how different commitment limitations and market features affect pricing and surplus shares we also determine endogenously

measuring the effects of search costs on equilibrium prices and profits abstract this paper assesses the effects of search costs on equilibrium prices and profits using an estimated model of demand and costs in a laundry detergent market i find that some firms profits initially rise and then fall with search costs overall the magnitude and direction of the search costs effects on prices and profits are heterogeneous this is because search costs create conflicting incentives for a firm to reduce prices to attract the attention of searching consumers yet also raise prices to harvest profit from consumers who are unaware of competing products these effects can vary with the relationship between the firms actual prices and the consumers pre search beliefs about prices

strategic and tactical price decisions in hotel revenue management abstract dynamic pricing techniques allow using a number of variables in a tactical way compared to standard catalogue prices this study merges in a conceptual model the relevance of the tactical and the strategic dimension of these variables classified according to their tangible reputational or contextual nature to empirically validate the hypotheses a database of 21 596 price observations was retrieved from booking com the study presents a hedonic price function using the shapley owen decomposition of the r squared to elicit the importance of each group of factors further a hierarchical cluster analysis measures the presence of heterogeneity across operators the results show that online reputation is gaining importance over the traditional star rating despite the tangible variables remain of paramount importance the findings suggest the relevant role of contextual variables in short run price variations the players operating in the tourism and hospitality industries should integrate these findings when designing pricing strategies

retail gasoline price dynamics and local market power using monthly data from the 48 contiguous states except nevada for the 1988 2002 period it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases moreover markets with high average retail wholesale margins experience a slower adjustment and a more asymmetric response since gasoline is the only variable input average margins in a state likely reflect the degree of retail market power this suggests that sticky prices and response asymmetries in the gasoline market are at least partially a consequence of retail market power

employer search training and vacancy duration we develop a model of optimal employer search strategy when information about match quality is endogenous the model is tested using four data sets two of which have not previously been used as theory predicts we find that when filling positions requiring more training employers search more intensively and extensively employers also search more extensively when hiring workers with more education and with prior experience these findings provide strong evidence of systematic variation in search strategies based on the characteristics of the positions and job applicants factors that influence employer search also affect the duration of a vacancy

the youth entitlement demonstration subsidized employment with a schooling requirement the during program employment and school enrollment effects of the youth incentive entitlement pilot projects yiepp are reported this program offered a minimum wage job part time during the school year and full time during the summer to 16 19 year olds from low income households the effect of yiepp is to provide a horizontal demand curve at the minimum wage permitting all target population youths who wish to work at this wage to do so 4 study sites denver cincinnati baltimore and 8 rural counties in southern mississippi and 4 comparison sites phoenix louisville cleveland and a group of counties in western and eastern mississippi were studied through household interviews some results are 1 yiepp increase the site wide average share of days spent both enrolled in school and employed form 9 4 of a youths time without the program to 28 with it 2 time spent in school and not employed decreased by 16 8 and 3 yiepp decreased the share of days spent neither enrolled in school nor employed by 5 3 the ratio of employment sector effects to yiepp employment rates is 74 2 for the public 52 9 for private and 68 4 for total employment unique features of this program are its entitlement nature with sufficient funds available to provide jobs to all eligibles who applied and the fact that school enrollment is required for participation subsidized employment increased total employment for the target population but this occurred with a displacement rate of 31 6 these estimates must be input into future benefit cost calculations of program efficacy

an optimal dynamic policy for hotel yield management abstract most research into the yield management problem has generated variations on the marginal seat revenue models that are based on simplifying assumptions about the demand process and heuristic decision rules in this paper a dynamic programming formulation of the problem is given allowing for general demand patterns and a policy that is based on time and the number of vacancies furthermore this policy incorporates both revealed price and hidden price market behavior it is shown that this formulation has a simple closed form solution that can be efficiently computed as a result a more general formulation of the problem with an optimal solution is available to hotels and airlines the particular application that motivated this model development is that of yield management for small hotels

costly diagnosis and price dispersion abstract in the standard search model under monopolistic competition when the consumer encounters a seller he knows the price before purchasing the commodity consequently the price cannot exceed the consumer s reservation price in a market with rational and homogeneous agents the price distribution must therefore be degenerate in markets for indivisible professional services the consumer does not necessarily know the price of the service when he encounters the seller this possibility arises when the cost of ascertaining the price the diagnosis cost is high and the consumer decides to enter the market without searching in contrast to the standard model under monopolistic competition price dispersion in equilibrium is possible even when fully rational economic agents on both sides of the market are homogeneous we characterize such equilibria and provide a sufficient condition for their existence we then study the effect of manipulating the search technology typically through a professional code of ethics on the equilibrium in markets for such professional services

price dispersion in an automobile insurance market from automobile insurance data for alberta over the period 1974 81 we find thatpremiums are highly correlated across driver classes in a given year but that premiums for a given driver class are not correlated over a period of more than 5 years firms relative market shares among drivers over age 25 and married males under 25 are inversely related to their deviations from the mean premiums in these driver classes the variance of real premiums decreases with the numberof firms in the market and increases with the real loss cost per car insured and the number of cars insured from these results we conclude that the price dispersion in automobile insurance in alberta is based on costly consumer search

number of sellers average prices and price dispersion abstract a variety of models provide differing predictions regarding the effect of an increase in the number of competitors in a market seller density on prices and price dispersion we review different approaches to generating equilibrium price dispersion and then empirically estimate the relationship between seller density average product price and price dispersion in the retail gasoline industry using four unique gasoline price data sets controlling for station level characteristics we find that an increase in station density consistently decreases both price levels and price dispersion across four geographical areas

impact of quality on estimations of hotel efficiency abstract this paper provides empirical evidence on the impact of output quality on hotel efficiency it demonstrates how ignoring quality can lead to erroneous efficiency estimates the study uses stochastic frontier methodology and the model proposed by battese and coelli 1995 to estimate the efficiency of 838 hotels in spain in the period 2009 2013 the key advantage of this methodology is its ability to estimate efficiency and identify factors that explain differences in efficiency in a single stage sampling procedure estimates of cost efficiency which only include the costs of higher quality are compared to those of profit efficiency which not only consider costs but also the revenues generated by higher quality results show that quality has a negative impact on cost efficiency and a positive one on profit efficiency thus hotel management should implement strategies that increase the value of their services as a way to achieve sustainable competitive advantages

output price markups and producer size abstract this paper examines how output prices and markups vary across the size distribution of producers it uses unique plant level data on physical output revenue and input expenditures for six homogeneous u s manufactured products the results reveal that for five of the six products output prices decline systematically with increases in plant size in the most extreme case corrugated boxes the smallest producers have prices that average 20 percent above the mean price while the largest producers average 10 percent below the mean at the other extreme the price dispersion for gasoline is small and unrelated to plant size plant specific markups of price over marginal cost vary across the size distribution of producers for five of the products in three cases they decline in two cases they increase and one product gasoline shows no systematic variation

nonstandard foundations of equilibrium search models abstract we develop an equilibrium sequential search model which includes most of the literature as special cases in particular the model can accommodate heterogeneity in buyers search costs and demand functions and firms cost functions with general demand and cost functions we identify conditions which ensure existence of equilibrium in pure strategies utilizing recent progress in the theory of large games by khan and sun these conditions elucidate the essential structure of equilibrium search models although we focus on sequential search our methodology can be used for other classes of equilibrium search models as well

the effect of economic opportunity and family background on adolescent cohabitation on adolescent cohabitation and childbearing among low income blacks this article uses a hazards model permitting continuous covariates and fixed effects to estimate the effect of local employment opportunity and family background on the cohabitation and childbearing of black youths from low income households support is found for w j wilson s hypothesis that employment opportunity encourages the formation of cohabitational unions as well as for the opportunity cost hypothesis that employment opportunity discourages childbearing outside such unions however the latter effect appears to be larger suggesting that the opportunity cost hypothesis is the primary channel through which higher employment rates result in lower rates of illegitimacy among underclass youths

relationship between spatial agglomeration and hotel prices evidence from business and tourism consumers abstract in this paper we examine the relationship between number of local competitors and both the average and the dispersion of retail prices in urban hotels using a dataset from the metropolitan area of madrid spain by controlling for hotel characteristics and spatial factors we obtained results for each of the days in one week in line with predictions derived from the traditional monopolistic approach empirical results consistently indicate that a greater density of competitors implies a lower average and less dispersion of local prices moreover we found evidence which supports the idea that the effect of local agglomeration on average prices is particularly weaker at weekends this in turn indirectly suggests that within the metropolitan area there is a greater degree of substitution in hotel locations for tourism consumers than for business consumers

advertising intensity and welfare in an equilibrium search model i analyze an equilibrium search model in a duopoly setting with bilateral heterogeneities in production and search costs in which firms can advertise by announcing price i compare the market advertising level to the socially optimal level where i find that costly search can improve welfare and that firms may under or over advertise relative to the social optimum depending on the costs of search the results suggest that in markets with sufficiently low search costs firms are likely over advertising relative to the socially optimal level and vice versa for markets with sufficiently high search costs

when quality signals talk evidence from the turin hotel industry abstract this study analyzes the relationship between quality signals and price setting through the application of hedonic price functions the model proposals also include variables relating to land use policies and tourism development strategies a simultaneous equation model endogenously estimates quality signals this method is appropriate for analyzing emerging urban destinations as characterized by the presence of an expanding hotel industry the results are based on a dataset of 145 hotels in turin italy the empirical findings reveal that reputation based quality signals help explain tariff levels price proposals also include a premium for quality assured hotels defining some limits of the current hotel classification system the empirical evidence has significant marketing implications for the hospitality industry s competitiveness since the results clarify the impact of quality signals on price level

insiders vs outsiders in the hotel sector we investigate whether entering an official hotel classification system is as lucrative as suggested in the tourism management literature indeed in countries in which the official hotel classific

a simple model of price dispersion abstract this article considers a simple stock flow matching model with fully informed market participants unlike the standard matching literature prices are assumed to be set ex ante when sellers pre commit themselves to sell their products at an advertised price the unique equilibrium is characterized by price dispersion due to the idiosyncratic match payoffs in a marketplace with full information this provides new insights into the price dispersion literature which instead commonly assumes that buyers are not perfectly informed and engage in a costly search

the law and economics of franchise tying contracts this paper analyzes from an economic perspective current antitrust law with regard to franchising requirements contracts where a franchisee must purchase an input from the franchisor or from a particular supplier designated by the franchisor the law takes an extremely hostile view toward such tie in contracts at least on the surface by stating that tying is a per se offense the court has said that such contractual arrangements generally serve hardly any purpose beyond the suppression of competition 2 and has held it not necessary to demonstrate anticompetitive effect before declaring them illegal the per se standard under which tying arrangements are analyzed is unusual because of the essential role of economic analysis to prove the existence of a per se illegal tying arrangement one must demonstrate economically that three conditions are met first that two separate products exist second that there is sufficient market power in the tying good and third that a not insubstantial amount of commerce in the tied good market is affected 3 in addition the per se standard permits affirmative defenses such as the use of tying for quality control and these also often entail sophisticated economic analysis as justice o connor correctly

minimum wages and teenagers enrollment employment outcomes a multinominal logit model this paper tests the hypothesis that the effect of minimum wage legislation on teenagers education decisions is asymmetrical across family income classes with the legislation inducing children from low income families to reduce their levels of schooling and children from higher income families to increase their educational attainment we use data from the national longitudinal surveys nls and exploit the fact that although the minimum wage is fixed at a point in time its value relative to adult wages varies across areas multinomial logit models of teenagers enrollment employment outcomes are estimated the hypothesis appears to be confirmed for white teens however the evidence for nonwhites is more ambiguous

equilibrium price dispersion in retail markets for prescription drugs this study seeks to establish the empirical importance of price dispersion due to costly consumer search by examining retail prices for prescription drugs posted prices in two geographically distinct markets are shown to vary considerably across pharmacies within the same market even after one controls for variation due to pharmacy differences pharmacy heterogeneity accounts for at most one third of the observed price dispersion the empirical analysis hinges on the observation that consumers incentives to price shop depend on characteristics of the drug therapy cross sectional patterns in price distributions across drugs are consistent with the predictions of a search model prices for repeatedly purchased prescriptions for which the expected benefits of search are highest exhibit significant reductions in both dispersion and price cost margins

market accessibility and hotel prices in the caribbean the moderating effect of quality signaling factors abstract the purpose of the paper is to investigate the influence of market accessibility on hotel prices and how this influence is moderated by various quality signaling factors such as online user ratings thumbs up recommendation percentage hotel class and chain affiliation using a randomized sample of hotels in the caribbean islands we employ a three level mixed effect linear regression model to investigate the plausible relationship between market accessibility and hotel prices after controlling for unobserved island level and hotel level characteristics the model indicates that in most periods low market accessibility high flight costs leads to lower hotel prices and this influence is mitigated by well established positive reputations as represented by the quality signaling factors our findings imply that hotels should work to increase their reputations to help buffer the impacts of inaccessibility in an effort to increase market accessibility one course of action is to reduce airport landing taxes and fees

the impact of collusion on price behavior empirical results from two recent cases abstract we use extended arch and garch models to examine the differences in the behavior of the first two moments of the price distribution during collusive and competitive phases of two recently discovered conspiracies citric acid and lysine according to our results the conspirators managed to raise prices by 9 and 25 cents per pound in the short run relative to non collusive periods also the variance of prices during the lysine conspiracy was lower and the variance of prices during the citric acid conspiracy was higher than during more competitive periods the proposed methodology may be used for antitrust screening and prosecution purposes

search costs and equilibrium price dispersion in auction markets abstract a leading explanation for price dispersion in posted price markets is search costs we incorporate this insight into a model of competing second price auctions similar to ebay by doing so we extend the narrow literature on competing auctions to capture price dispersion and grow the already large literature on price dispersion to include auctions we provide evidence on search costs and price dispersion using data collected from ebay identifying search costs by exploiting a discontinuity in the visibility of auctions due to ebay s search tool

a model of market power in customer markets we develop a model for studying dynamic competition in environments with frictions that lead to partial lock in of customers to products the dynamic aspects associated with customer retention and acquisition introduce pricing incentives that do not exist in more traditional static product markets the proposed model while highly stylized maintains certain symmetry properties that allow us to obtain equilibrium existence and uniqueness we then study the comparative statics of the model and derive a closed form relationship between average equilibrium markups and the herfindahl index we illustrate how the model can be used by analyzing mergers in such a dynamic environment

consumer discrimination and self employment self employment rates and incomes differ significantly by race we show that these differentials arise in markets with consumer discrimination and incomplete information about the price of the good and the race of the seller equilibrium income distributions have two properties mean black incomes are lower than mean white incomes and the returns to ability are lower for black than for white sellers able blacks therefore are less likely to self select into the self employment sector than able whites using the 1980 census data we find that observed racial differences in the self employment income distributions are consistent with the theoretical predictions

price price dispersion and number of sellers at a low entry cost shopbot abstract shopbots function as market intermediaries by providing unprecedented quantities of information to buyers and sellers this paper explores the role of market structure across shopbot mediated markets using an unbalanced panel of 399 digital camera models it extends prior work by using an ultra low entry cost site additionally allowing controls for life cycle and popularity effects we find a robust negative relationship between seller number and price which persists even as markets become crowded with sellers the results are capable of either an scp or a carlson mcafee heterogeneous cost interpretation but observed entry behaviour here is consistent with the latter

product differentiation search costs and competition in the mutual fund industry a case study of s p 500 index funds we investigate the role that non portfolio fund differentiation and information search frictions play in creating two salient features of the mutual fund industry the large number of funds and the sizeable dispersion in fund fees in a case study we find that despite the financial homogeneity of s p 500 index funds this sector exhibits the fund proliferation and fee dispersion observed in the broader industry we show how extra portfolio mechanisms explain these features these mechanisms also suggest an explanation for the puzzling late 1990s shift in sector assets to more expensive and often newly entered funds an influx of highinformation cost novice investors

buyer search and price dispersion a laboratory study we study markets with costly buyer search in which sellers simultaneously post prices buyers costlessly observe one or with probability 1 q two of the posted prices and can accept one or pay to search again the experiment varies q the search cost and the number of buyers equilibrium theory predicts a unified very low high price for q 0 q 1 and predicts specific distributions of dispersed prices for q 1 3 and 2 3 actual prices conform closely to the predictions in some treatments buyers reservation prices are biased away from the extremes however and sellers prices have positive autocorrelation and cross sectional correlation

entry and price dynamics in a perfect foresight model abstract this paper studies firms entry and price dynamics in a model that combines the assumptions of free entry and perfect foresight with the hypothesis of consumer s loyalty postulated by phelps and winter the analysis of the transition to long run equilibrium reveals that in such a model the entry of firms is related to the difference between current prices and costs in relation to the growth of the firms output it is shown that the model is consistent with gibrat s law finally it is shown that the size distribution of firms approaches asymptotically a pareto distribution

price distributions and competition considerable evidence demonstrates that significant dispersion exists in the prices charged for seemingly homogeneous goods this paper adopts a simple flexible equilibrium model of search to investigate the way the market structure influences price dispersion using the noisy search approach the paper demonstrates the effects of having a single large price leading firm with multiple outlets and a competitive fringe of small firms with one retail outlet each

firm size distribution testing the independent submarkets model in the italian motor insurance industry this paper tests the presence of multiple independent submarkets in the italian motor insurance industry independence is motivated by administrative boundaries among provinces and by further locational reasons we find that the independence effects are sufficient to induce a minimum degree of inequality in the size distribution of firms once submarkets are aggregated these results are fully consistent with the predictions of sutton 1998 we also show that the degree of skewness in the firms size distribution is related to characteristics such as the population living in an area its density and the riskiness of a submarket