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Baye Morgan Scholten (2006) - Information Search and Price Dispersion (view source)
Revision as of 04:45, 26 January 2010
, 04:45, 26 January 2010→Sequential Search Models
<center><math>B(z) = \int_{\underline{p}}^{z} (v(p) - v(z))dF(p) = \int_{\underline{p}}^{z} v'(p)dF(p)\,</math></center>
By [http://en.wikipedia.org/wiki/Leibniz's_rule Liebnitz' rule]:
<center><math>B'(z) = -v'(z)dF(z) = Kz^{\epsilon}F(z) > 0\,</math></center>
Therefore a the reservation price is increasing in search costs. Note the special case where <math>q(r)=1\,</math> leads to a magnification effect, but attenuation effects are also possible.
===Reinganum (1979) Revisited===
