I use a flexible price version of the Prescott (1975) “hotels” model to study a dynamic model that allows for storage. The formulation follows the standard competitive analysis tradition with a non-standard definition of markets: The set of markets that open depends on the state of demand. I...

I use the Prescott (1975) hotels model to explain variations in price dispersion across goods sold by supermarkets in Chicago. I extend the theory to accounts for the monopoly power of chains and for non-shoppers. The main empirical finding is that the effect of demand uncertainty on price...