Salop and Stiglitz analyzed an equilibrium search model under a Stackelberg assumption that consumers could react to changes in the distribution of prices charged by firms even though they did not know which particular firms were charging the lowest price. In this chapter we assume that firms...

We find equilibrium price distributions in a search model with asymmetric duopolists whose marginal costs differ. There are informed consumers who know both prices and buy at the lower one and uninformed consumers who, not knowing prices, choose a store arbitrarily. With asymmetries, pure...