scholarly journals Comparison Shopping Agents and Online Price Dispersion: A Search Cost based Explanation

2012 ◽  
Vol 7 (1) ◽  
pp. 11-12 ◽  
Author(s):  
Bhavik K. Pathak
Keyword(s):  
Price Dispersion ◽  
Search Cost ◽  
Comparison Shopping

scholarly journals Search Cost and Price Dispersion in Vertically Related Markets: The Case of Bank Loans and Deposits

2008 ◽  
Vol 33 (4) ◽  
pp. 297-323 ◽  
Author(s):  
Alfredo Martin-Oliver ◽  
Vicente Salas-Fumas ◽  
Jesús Saurina
Keyword(s):  
Price Dispersion ◽  
Bank Loans ◽  
Search Cost

scholarly journals Bargaining, Search, and Price Dispersion: Evidence from the Live Hogs Market

2010 ◽  
Vol 39 (3) ◽  
pp. 534-546 ◽  
Author(s):  
Tomislav Vukina ◽  
Xiaoyong Zheng
Keyword(s):  
Panel Data ◽  
Price Dispersion ◽  
Strong Support ◽  
Large Degree ◽  
Spot Market ◽  
Search Theory ◽  
Search Cost ◽  
Price Variation ◽  
Theoretical Predictions

Using unique panel data on individual transactions between buyers and sellers in the spot market for live hogs, we found a large degree of intra-day price dispersion. Motivated by this empirical puzzle, we offer an explanation which is rooted in the bargaining with search theory. We formulate three hypotheses involving the role of farmers’ search cost, bargaining parties’ patience, and asymmetric information that we believe can explain the observed phenomenon. Empirical analysis shows strong support for all three of the stated theoretical predictions, indicating that the bargaining with search theory explains at least 31 percent of the observed intra-day price variation in this market.

The Double Diamond Paradox

2017 ◽  
Vol 9 (3) ◽  
pp. 63-99 ◽  
Author(s):  
Daniel Garcia ◽  
Jun Honda ◽  
Maarten Janssen
Keyword(s):  
Social Welfare ◽  
Alternative Explanation ◽  
Price Dispersion ◽  
Bimodal Distribution ◽  
Consumer Search ◽  
Search Cost ◽  
Monopoly Price ◽  
Pass Through ◽  
Double Diamond ◽  
Regular Price

We study vertical relations in markets with consumer and retailer search. We obtain three important new results. First, we provide a novel explanation for price dispersion that does not depend on some form of heterogeneity among consumers. Price dispersion takes on the form of a bimodal distribution. Second, under competitive conditions (many retailers or small consumer search cost), social welfare is significantly smaller than in the double marginalization outcome. Manufacturers' regular price is significantly above the monopoly price, squeezing retailers' markups and providing an alternative explanation for incomplete cost pass-through. Third, firms' prices are decreasing in consumer search cost. (JEL D11, D21, D43, D83, L13, L60, L81)

Equilibrium Price Dispersion with Search Regret Disutility

2020 ◽  
pp. 232102221988755
Author(s):  
Evangelos Rouskas
Keyword(s):  
Price Dispersion ◽  
Search Costs ◽  
Equilibrium Price ◽  
Reservation Price ◽  
Sequential Search ◽  
Price Equilibrium ◽  
Search Cost ◽  
Equilibrium Search ◽  
Search Intensity ◽  
Search Equilibrium

I examine an extension of the Burdett and Judd ([1983] . Equilibrium price dispersion. Econometrica, 51[4], 955–970) model whereby the consumers with positive search costs experience search regret disutility. First, I focus on the non-sequential search equilibrium in which the said consumers randomize between searching for one price and searching for two prices. When the disutility is significant (a) the spectrum of parameters for which this dispersed price equilibrium can be sustained widens significantly compared to the setting with no disutility; (b) this dispersed price equilibrium is unique and stable in contrast to the multiplicity of dispersed price equilibria of this type which arise in the original model; and (c) in the stable dispersed price equilibrium of this type the consumers with positive search costs respond to the possibility of search regret disutility by increasing their equilibrium search intensity. Second, I concentrate on the noisy sequential search equilibrium in which the reservation price is endogenous. When the search cost takes relatively high values, then compared to the setting with no disutility (a) the set of parameters for which this dispersed price equilibrium is supported may become significantly smaller; (b) the reservation price decreases; and (c) the consumers with positive search costs choose the same search intensity. JEL Classifications: D41, D83

scholarly journals An Exploration of Initial Purchase Price Dispersion and Service-Subscription Duration

2019 ◽  
Vol 11 (9) ◽  
pp. 2481 ◽  
Author(s):  
Seung Hwan (Shawn) Lee
Keyword(s):  
Relative Position ◽  
Price Dispersion ◽  
Frequency Theory ◽  
High Price ◽  
Purchase Price ◽  
Search Cost ◽  
Price Information ◽  
Service Value ◽  
Software Service ◽  
The Relationship

Despite the readily available consumer price information, price dispersion persists for products and services and has been extensively researched. However, there is scant literature on the influence of price dispersion on consumer behavior. The present study uses actual consumer purchase data of software service subscriptions and applies range–frequency principles to investigate how a customer’s price and relative position along a distribution at initial subscription might impact their subscription lifetimes. The study findings reveal that, in general, consumers paying higher initial prices retain their subscriptions longer, confirming the relationship between a consumer’s service value expectation and search cost. However, the amount of a consumer’s paid prices relative to that of other consumers’ can be helpful in predicting subscription duration. Consumers paying a relatively high price compared with others with similar subscription beginning dates have shorter subscription durations, which raise a concern regarding use of individual customer’s price information. The study suggests that principles of range–frequency theory are useful for comprehensively integrating price dispersion information. One interesting and counterintuitive implication of our analysis is that advantaged-price inequities (where the focal customer’s paid price is lower compared to another customer’s paid price) can also raise concerns about unfairness.

Comparison Shopping

2012 ◽  
Vol 43 (12) ◽  
pp. 10
Author(s):  
ALAN ROCKOFF
Keyword(s):  
Comparison Shopping
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