A New Model of Persistent Retail Price Dispersion
10 Pages Posted: 18 Jul 2005
Date Written: July 6, 2005
Abstract
Price dispersion persists, even on the Internet where search costs are small. One reason may be that consumers prefer randomized prices to fixed prices, implying that retail price data will always show some degree of price dispersion.
Keywords: Price dispersion, uncertainty, risk, indirect utility, von Neumann, Morgenstern, price theory, one price, law of one price
JEL Classification: D11, D40, L11
Suggested Citation: Suggested Citation
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