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Baye Morgan Scholten (2006) - Information Search and Price Dispersion (view source)
Revision as of 21:23, 25 January 2010
, 21:23, 25 January 2010no edit summary
The consumer seeks to minimize the expected cost (purchase + search) given by:
<center>
<math>E(C) = K E\(p_minp_{min}^{(n)\}) + cn\,</math>
where <math>\mathbb{E}\(p_min^(n)\) = \mathbb{E}\(min\{p_1,p_2,\ldots,p_n\}\) \,</math>
The distribution of the lowest <math>n\,</math> draws is: <math>F_{min}^{(n)}(p) = 1 - (1-F(p))^n\,</math>
