This paper studies the incentives to merge in a Bertrand competition model where firms sell differentiated products and consumers search the market for satisfactory deals. In the pre-merger market equilibrium, all firms look alike and so the probability a firm is next in the queue consumers...

Prices usually adjust much faster when costs increase than when costs decrease. The mechanism driving this Rockets-and-Feathers phenomenon is not well understood despite of ample empirical evidence for its existence.We use simple experimental markets with and without consumer search and either...

Consumers often complain that retail prices respond faster to increases in wholesale prices than to decreases. Despite many empirical studies confirming this "Rockets-and-Feathers" phenomenon for different industries, the mechanism driving it is not well understood. In this paper, we show that,...

This paper studies the incentives to merge in a Bertrand competition model where firms sell differentiated products and consumers search the market for satisfactory deals. In the pre-merger market equilibrium, all firms look alike and so the probability a firm is next in the queue consumers...

Competition among bureaucrats for bribe revenue has often been viewed as a way to reduce the incidence and magnitude of bribe payments. This paper proposes a model where firms can search among multiple corrupt bureaucrats to find the cheapest bribe associated with obtaining a required service....

In frictional matching markets with heterogeneous buyers and sellers, sellers incur discrete showing costs to show goods to buyers who incur discrete inspection costs to assess the suitability of the goods on offer. This paper studies how brokers can help reduce these costs by managing the level...

This paper characterizes conditions under which centralized and decentralized markets (CM/DM) co-exist for asset trading. The asset payoff and trading motive are seller's private information. CM is immune to search frictions, but suffers from adverse selection. DM with bilateral trading may...

This paper presents an empirical examination of oligopoly pricing and consumer search. The theoretical model allows for sequential and non-sequential search and, using the theoretical restrictions firm and consumer behavior impose on the data, we study the empirical validity of the models. Two...

We modify the paper of Stahl (1989) on sequential consumer search in an oligopoly context by relaxing the assumption that consumers obtain the first price quotation for free. When all price quotations are costly to obtain, a new equilibrium arises where consumers randomize between not searching...

In markets with search frictions, consumers can acquire information about goods either through costly search or from friends via word-of-mouth (WOM) communication. How do sellers’ market power react to a very large increase in the number of consumers’ friends with whom they engage in WOM?...