AN EQUILIBRIUM SEARCH MODEL OF SYNCHRONIZED SALES * | Zendy

Albrecht James | Zendy; PostelVinay Fabien | Zendy; Vroman Susan | Zendy

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AN EQUILIBRIUM SEARCH MODEL OF SYNCHRONIZED SALES *

Author(s) -

Albrecht James,

PostelVinay Fabien,

Vroman Susan

Publication year - 2013

Publication title -

international economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 2.658

H-Index - 86

eISSN - 1468-2354

pISSN - 0020-6598

DOI - 10.1111/iere.12003

Subject(s) - search theory , product (mathematics) , simple (philosophy) , period (music) , computer science , econometrics , economics , mathematical economics , microeconomics , mathematics , physics , philosophy , geometry , epistemology , acoustics

We demonstrate the existence of periodic nonstationary equilibria with self‐generating cycles in a simple model of random search. Our results provide a theory of synchronized sales based on product market search by heterogeneous consumers. That is, our model explains how it can be optimal for all sellers to follow a repeated pattern of posting a high price for several periods and then posting a low price for one period.

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