Cost reduction and consumer search



Downloads per month over past year

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

[thumbnail of 9805.pdf]
Creative Commons Attribution Non-commercial Share Alike.


Official URL:


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)
ID Code:28794
Deposited On:25 Feb 2015 18:54
Last Modified:25 Feb 2015 18:54

Origin of downloads

Repository Staff Only: item control page