Price Dispersion and Short Run Equilibrium in a Queuing Model
Price dispersion is analyzed in the context of a queuing market where customers enter queues to acquire a good or service and may experience delays. With menu costs, price dispersion arises and can persist in the medium and long run. The queuing market rations goods in the same way whether firm prices are optimal or not. Price dispersion reduces the rate at which customers get the good and reduces customer welfare.
Year of publication: |
2003
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Authors: | Sattinger, Michael |
Institutions: | University at Albany, SUNY, Department of Economics |
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