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Macro shocks cause equilibrium price dispersion

De Meza, David and Reito, Francesco (2021) Macro shocks cause equilibrium price dispersion. Economics Letters, 208. ISSN 0165-1765

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Identification Number: 10.1016/j.econlet.2021.110082


Price dispersion is shown to arise when demand is stochastic, ex-ante identical competitive firms set price prior to the realization of uncertainty and ex-ante identical buyers cannot switch sellers if rationed.

Item Type: Article
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Additional Information: Crown copyright © 2021 Published by Elsevier B.V
Divisions: Management
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HB Economic Theory
JEL classification: D - Microeconomics > D6 - Welfare Economics > D61 - Allocative Efficiency; Cost-Benefit Analysis
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Date Deposited: 10 Sep 2021 11:15
Last Modified: 17 Nov 2021 01:04

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