Abstract
The Diamond paradox (Diamond, 1971) asserts that in a market for a homogeneous good, if all consumers have positive search costs and search sequentially, then the unique equilibrium price is the monopoly price. I show that any finitely repeated version of this search game may support competitive prices.
Original language | English |
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Article number | 109933 |
Journal | Economics Letters |
Volume | 205 |
DOIs | |
State | Published - Aug 2021 |
Bibliographical note
Publisher Copyright:© 2021 Elsevier B.V.
Keywords
- Diamond paradox
- Finitely repeated games
- Sequential search