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Apr
22
UCLouvain Economics Seminar - Aleksei Parakhonyak, Oxford University
By UCLouvain Economics Seminar

Aleksei Parakhonyak

Oxford University

will give a presentation on

Dynamic Consumer Search

Abstract:

We consider a model in which firms sell differentiated products, and consumers are interested in buying repeatedly over time but need to search for price and product information. Firms and consumers turn over at an exogenous rate. We show that provided the search cost is not too large, the market exhibits pure strategy price dispersion. Specifically, older firms charge higher prices because they face a larger and `better-matched' demand. The fact that sellers gradually raise their prices over time also leads to rich consumer search and purchase dynamics. For example, consumers may initially search a lot for a product, return to the seller and buy for several periods, but then faced with successive price increases quit the firm and search again for a new product. We also provide conditions under which the ability of sellers to contact past customers and offer them personalized prices leads to higher consumer surplus.

Joint with Andrew Rhodes.

Link to the Seminar
Date
22 April
Time
12:45 - 14:00
Location
CORE B-135
Voie du Roman Pays, 34
Ottignies-Louvain-la-Neuve, Wallonie Belgique
Online
This is an online event at CORE B-135
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