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Cost reduction and consumer search

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Pereira, Pedro (1998) Cost reduction and consumer search. [ Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE); nº 05, 1998, ]

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Official URL: http://eprints.ucm.es/28794/


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Abstract

Some markets are characterized by a systematic relation between how costly it is for consumers to observe prices, market power, and incentives to reduce costs. This paper offers a model of such markets and discusses incentives to invest in cost reduction. I develop two partial equilibrium models, aue static, other dynamic, where technology is determined endogenoussly throug stochastic investment, firms set prices, entry is free and consumers search for prices. I use the static model to discuss market power and price controls and the dynamic model to discuss cost volatility and predation.


Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Reducción de costes; Consumidores.
Subjects:Social sciences > Economics > Accounting
Series Name:Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE)
Volume:1998
Number:05
ID Code:28794
Deposited On:25 Feb 2015 18:54
Last Modified:25 Feb 2015 18:54

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