Asymmetric Sequential Search

This note explores asymmetries in the way consumers sample prices in a simple variation of Stahl's (1989) seminal model of sequential search. In the note, we characterize a unique equilibrium in which a firm that caters to more local consumers selects prices from a distribution which first order stochastically dominates that of its rival and contains mass at the upper bound of firm price distributions. Both firms exhibit higher prices as the proportion of consumers local to one firm rises, though surprisingly, at the limit, the Diamond paradox may not manifest