This note presents necessary conditions for non-degenerate price dispersion in a continuous atomistic market where buyers with price-elastic demand search sequentially for the lowest price, and firms maximize profit subject to a variable average cost function

This paper derives an optimal monopoly pricing rule under the assumption that firms facing uncertainty regarding its on the demand curve, are motivated to experiment with small price changes in favor of larger price change because of expected negative reactions. This feature introduces dynamics...

This paper is a contribution to the sticky-price literature based on an assumption that a monopolist is constrained in setting prices instantaneously because of an announcement effect whereby consumers respond negatively to large price increases. In effect, demand becomes a function of price and...

This paper presents an equation of the dynamic path of prices in a monopolistically competitive market in which firms sell to both old and new customers. Both types are able to search for the lowest price, given search costs, where the expected number of searches is given by the inverse of the...

This paper analyzes the behavior of prices and finished-goods inventories in a model of monopolistic competition, where the motivation for holding inventories is the prospect of lost sales. An eventual goal of the present investigation is the development of an empirical framework, based on a...