Price distributions and competition

This paper utilizes an equilibrium search model to investigate market structure and price dispersion. In a market with one large firm and a competitive fringe, the large firm offers the highest price. Fringe firms offer a distribution of lower prices.

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Bibliographic Details
Published in:Economics letters 2010-03, Vol.106 (3), p.180-183
Main Authors: Burdett, Ken, Smith, Eric
Format: Article
Language:English
Subjects:
Competition
Competitive fringe
Distribution
Equilibrium models
Market leader
Price differentiation
Price dispersion
Search
Search Price dispersion Market leader Competitive fringe
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Description
Summary:This paper utilizes an equilibrium search model to investigate market structure and price dispersion. In a market with one large firm and a competitive fringe, the large firm offers the highest price. Fringe firms offer a distribution of lower prices.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2009.11.014