Gabaix, Xavier; Laibson, David; Li, Deyuan; Li, Hongyi; … - Economic Science Institute (ESI), Argyros School of … - 2013
We use extreme value theory (EVT) to develop insights about price theory. Our analysis reveals "detail-independent" equilibrium properties that characterize a large family of models. We derive a formula relating equilibrium prices to the level of competition. When the number of firms is large,...