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Price Distribution in a Symmetric Economy

  • Klaus Kultti and Juha Virrankoski
Published/Copyright: April 22, 2003
Topics in Macroeconomics
From the journal Topics in Macroeconomics Volume 3 Issue 1

We consider an economy with symmetric buyers and symmetric sellers. The sellers are in locations and post prices simultaneously. The buyers observe the prices, and each buyer visits one location. The buyers act independently and employ symmetric mixed strategies. We show that when there are several sellers in a location, the Nash equilibrium features price dispersion, i.e. the sellers post different prices. The equilibrium strategy of the sellers is a non-atomic distribution.

Keywords: price distribution; search
Published Online: 2003-4-22

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  25. Explaining Movements in the Labor Share
  26. Endogenous Growth with Intertemporally Dependent Preferences
  27. On the Friedman Rule in Search Models with Divisible Money
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https://doi.org/10.2202/1534-5998.1061
Keywords for this article
price distribution; search

Articles in the same Issue

  1. Topics Article
  2. Balance of Payments Constrained Non-Scale Growth and the Population Puzzle
  3. The Human Capital Constraint: Of Increasing Returns, Education Choice and Coordination Failure
  4. ``To Furnish an Elastic Currency'': Banking, Aggregate Risk, and Welfare
  5. How Prudent are Community Representative Consumers?
  6. Price Distribution in a Symmetric Economy
  7. The Role of Stock Markets in Current Account Dynamics: a Time Series Approach
  8. Shiftwork, Adjustment Costs and Uncertainty
  9. How Do Future Constraints Affect Current Investment?
  10. The Politics of Endogenous Growth
  11. Sticky Prices, Coordination and Enforcement
  12. Fractional Integration with Bloomfield Disturbances in the Specification of Real Output in the G7 Countries
  13. Monetary Policy When the Nominal Short-Term Interest Rate is Zero
  14. High-Tech Human Capital: Do the Richest Countries Invest the Most?
  15. Substitution Elasticities and Investment Dynamics in Two-Country Business Cycle Models
  16. Contributions Article
  17. On Modeling the Effects of Inflation Shocks: Comments and Some Further Evidence
  18. Optimal Monetary Policy and the Correlation between Prices and Output
  19. Are Banking Supervisory Data Useful for Macroeconomic Forecasts?
  20. An Analytical Approach to the Welfare Cost of Business Cycles and the Benefit from Activist Monetary Policy
  21. Interpreting the Significance of the Lagged Interest Rate in Estimated Monetary Policy Rules
  22. Idle Capital and Long-Run Productivity
  23. The Money Metric, Price and Quantity Aggregation and Welfare Measurement
  24. Parente and Prescott's Theory May Work in Practice But Does Not Work in Theory
  25. Explaining Movements in the Labor Share
  26. Endogenous Growth with Intertemporally Dependent Preferences
  27. On the Friedman Rule in Search Models with Divisible Money
  28. Finance Causes Growth: Can We Be So Sure?
  29. Advances Article
  30. Where Is the Natural Rate? Rational Policy Mistakes and Persistent Deviations of Inflation from Target
  31. Downward Nominal Wage Rigidity: Evidence from the Employment Cost Index
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