Empirical evidence suggests that prices are sticky with respect to cost changes. Moreover, prices respond more rapidly to cost increases than to cost decreases. We develop a search theoretic model which is consistent with this evidence and allows for additional testable predictions. Our results...

One suggested rationale for asymmetric price adjustments by firms is that firms are responding to asymmetric search behavior by consumers. Empirical evidence of asymmetric consumer search is limited due to the difficulties in observing search behavior, but theoretical models assume this...

Should a seller make information about its products readily accessible to customers, so that customers do not have to incur any substantive cost — in terms of time and effort — to learn about those products? To help answer this question, we consider a monopolist selling two substitute...