Macro shocks cause equilibrium price dispersion

De Meza, David ORCID: 0000-0002-5638-8310 and Reito, Francesco (2021) Macro shocks cause equilibrium price dispersion. Economics Letters, 208. ISSN 0165-1765

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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:	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:	31 May 2024 01:12
URI:	http://eprints.lse.ac.uk/id/eprint/111897

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