I show that marginal cost asymmetry has important implications for search models. In several widely used search models with mixed strategy equilibria, excluding some special cases, firms with different marginal costs cannot randomize prices in the same interval. So, even a small asymmetry in...

We show that the Bertrand oligopoly model with cost asymmetries may admit multiple Nash equilibria when firms hold passive ownership stakes in each other. The equilibrium price may be as high as the monopoly price of the most efficient firm.

This paper proposes a two-good model of price competition, where some consumers visit all shops and others visit only one. We find that information frictions lead to price dispersion. When the two goods are complements, their prices will tend to be negatively correlated, so if one is priced...