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Reiganum Reinganum (1979) showed that price dispersion could exist with sequential search as well as with optimizing consumers and optimizing firms.
Reiganum Reinganum (1979) shows that under these assumptions there is an equilibrium in which firms optimally set prices, consumers engage in optimal sequential search, and yet there is still price dispersion. We return to the Reiganum (1979) model after a discussion of sequential search.
Baye Morgan Scholten (2006) - Information Search and Price Dispersion (view source)
Revision as of 05:28, 26 January 2010
, 05:28, 26 January 2010no edit summary
==Key Reference(s)==
Diamond (1971)
Reinganum (1979)
Rothschild (1973)
Stigler (1961)
==Introduction==
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===The Reiganum Reinganum (1979) Model===
Consider the following special case of our environment:
<center><math>v \left ( \frac{\epsilon}{1+\epsilon}\overline{m} \right ) > c\,</math></center>
