Cost reduction and consumer search
Some markets are characterized by a systematic relation between how costly it is for consumers to observe prices, market power, and incentives to reduce costs. This paper offers a model of such markets and discusses incentives to invest in cost reduction. I develop two partial equilibrium models, au...
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| Tipo de recurso: | informe técnico |
| Fecha de publicación: | 1998 |
| País: | España |
| Institución: | Universidad Complutense de Madrid (UCM) |
| Repositorio: | Docta Complutense |
| Idioma: | inglés |
| OAI Identifier: | oai:docta.ucm.es:20.500.14352/64206 |
| Acceso en línea: | https://hdl.handle.net/20.500.14352/64206 |
| Access Level: | acceso abierto |
| Palabra clave: | Reducción de costes Consumidores. Contabilidad (Economía) 5303 Contabilidad Económica |
| Sumario: | Some markets are characterized by a systematic relation between how costly it is for consumers to observe prices, market power, and incentives to reduce costs. This paper offers a model of such markets and discusses incentives to invest in cost reduction. I develop two partial equilibrium models, aue static, other dynamic, where technology is determined endogenoussly throug stochastic investment, firms set prices, entry is free and consumers search for prices. I use the static model to discuss market power and price controls and the dynamic model to discuss cost volatility and predation. |
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