Oligopolistic competition and search without priors
In this article, I examine a model of oligopolistic competition in which consumers search for prices but have no knowledge of the underlying price distribution. The consumers' behaviour satisfies four consistency requirements and, as a result, their beliefs about the underlying distribution max...
| Main Author: | |
|---|---|
| Format: | Journal article |
| Language: | English |
| Published: |
Oxford University Press
2014
|
| _version_ | 1826299758181875712 |
|---|---|
| author | Parakhonyak, A |
| author_facet | Parakhonyak, A |
| author_sort | Parakhonyak, A |
| collection | OXFORD |
| description | In this article, I examine a model of oligopolistic competition in which consumers search for prices but have no knowledge of the underlying price distribution. The consumers' behaviour satisfies four consistency requirements and, as a result, their beliefs about the underlying distribution maximise Shannon entropy. I derive the optimal stopping rule and equilibrium price distribution of the model. Unlike in Stahl (1989), the expected price is decreasing in the number of firms. Moreover, consumers can benefit from being uninformed, if the number of firms is sufficiently large. |
| first_indexed | 2024-03-07T05:06:48Z |
| format | Journal article |
| id | oxford-uuid:da343eca-bdf9-4825-bed7-a6294e9fc86b |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T05:06:48Z |
| publishDate | 2014 |
| publisher | Oxford University Press |
| record_format | dspace |
| spelling | oxford-uuid:da343eca-bdf9-4825-bed7-a6294e9fc86b2022-03-27T09:01:28ZOligopolistic competition and search without priorsJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:da343eca-bdf9-4825-bed7-a6294e9fc86bEnglishSymplectic Elements at OxfordOxford University Press2014Parakhonyak, AIn this article, I examine a model of oligopolistic competition in which consumers search for prices but have no knowledge of the underlying price distribution. The consumers' behaviour satisfies four consistency requirements and, as a result, their beliefs about the underlying distribution maximise Shannon entropy. I derive the optimal stopping rule and equilibrium price distribution of the model. Unlike in Stahl (1989), the expected price is decreasing in the number of firms. Moreover, consumers can benefit from being uninformed, if the number of firms is sufficiently large. |
| spellingShingle | Parakhonyak, A Oligopolistic competition and search without priors |
| title | Oligopolistic competition and search without priors |
| title_full | Oligopolistic competition and search without priors |
| title_fullStr | Oligopolistic competition and search without priors |
| title_full_unstemmed | Oligopolistic competition and search without priors |
| title_short | Oligopolistic competition and search without priors |
| title_sort | oligopolistic competition and search without priors |
| work_keys_str_mv | AT parakhonyaka oligopolisticcompetitionandsearchwithoutpriors |