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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. ISSN 0165-1765

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Identification Number: 10.1016/j.econlet.2021.110082

Abstract

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
Official URL: https://www.sciencedirect.com/journal/economics-le...
Additional Information: © 2021 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: 20 Oct 2021 01:08
URI: http://eprints.lse.ac.uk/id/eprint/111897

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