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)

Please note that the seminar will take place online on Zoom. You can join the Zoom call by clicking on this link. Meeting ID and Passcode are:

• Meeting ID: 812 6669 3186
• Passcode: 356427

Alexei will also be available for 30-minute meetings on that day. For those of you who would like to meet him, please register through the following link: 

https://doodle.com/poll/d5x37vnamhbuzpaz?utm_source=poll&utm_medium=link