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Baye Morgan Scholten (2006) - Information Search and Price Dispersion (view source)
Revision as of 15:28, 26 January 2010
, 15:28, 26 January 2010no edit summary
In the Rosenthal (1980) model we suppose:
*<math>\phi = 0\,</math> (i.e. costless listing)
*<math>\L > 0\,</math> (i.e. some loyal customers)
Since <math>\phi=0\,</math>, <math>\alpha=1\,</math> and all firms list at the clearinghouse. The equilibrium distribution of prices is therefore:
