NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Equilibrium Price Dispersion Across and Within Stores

Guido Menzio, Nicholas Trachter

NBER Working Paper No. 21493
Issued in August 2015
NBER Program(s):Economic Fluctuations and Growth, Industrial Organization

We develop a search-theoretic model of the product market that generates price dispersion across and within stores. Buyers differ with respect to their ability to shop around, both at different stores and at different times. The fact that some buyers can shop from only one seller while others can shop from multiple sellers causes price dispersion across stores. The fact that the buyers who can shop from multiple sellers are more likely to be able to shop at inconvenient times (e.g., on Monday morning) causes price dispersion within stores. Specifically, it causes sellers to post different prices for the same good at different times in order to discriminate between different types of buyers.

download in pdf format
   (318 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21493

Published: Guido Menzio & Nicholas Trachter, 2017. "Equilibrium price dispersion across and within stores," Review of Economic Dynamics, .

Users who downloaded this paper also downloaded* these:
Kaplan, Menzio, Rudanko, and Trachter w21931 Relative Price Dispersion: Evidence and Theory
Einav, Farronato, and Levin w21496 Peer-to-Peer Markets
Berry and Haile w21500 Identification in Differentiated Products Markets
Bagwell, Staiger, and Yurukoglu w21488 Multilateral Trade Bargaining: A First Look at the GATT Bargaining Records
Barwick, Pathak, and Wong w21489 Conflicts of Interest and the Realtor Commission Puzzle
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us