This paper applies recent advances in the theory of learning to the analysis of consumer behaviour, in the context of a market with a dominant firm and a competitive fringe. Dynamically optimal pricing for the dominant firm is characterised when consumers learn adaptively about the relative...

In many markets it is possible to find rival sellers charging different prices for the same good. Earlier research has explained this phenomenon by demonstrating the existence of dispersed price equilibria when consumers must make use of costly search to discover prices. Taking as a starting...

This paper considers the effects of changes in the income distribution in an economy where agents’ utility depends both on consumption and on their rank in the distribution of consumption of a positional good. We introduce a new methodology to compare the behavior of agents that occupy the...

A new method is proposed for the analysis of first price and all pay auctions, where bidding functions are written not as functions of values but as functions of the rank or quantile of the bidder’s value in the distribution from which it was drawn. This method gives new results in both...

In many markets it is possible to find rival sellers charging different prices for the same good. Earlier research has attempted to explain this phenomenon by demonstrating the existence of dispersed price equilibria when consumers must make use of costly search to discover prices. We ask...

This paper considers the effect of inequality when there are concerns for status. We analyse the effects of linear redistributive taxes in an economy where agents’ utility depends both on consumption and on their rank in the distribution of consumption of a positional good. This increase in...