Prices rise like rockets but fall like feathers. This stylized fact of most markets is confirmed by many empirical studies. In this paper, I develop a model with competitive firms and rational partially informed consumers where the asymmetric response to costs by firms emerges naturally. In...

This paper studies the role of imperfect information in explaining price dispersion. We use a new panel dataset on the U.S. retail gasoline industry, and propose a new test of temporal price dispersion to establish the importance of consumer search. We show that price rankings vary significantly...

We study the relationship between prices and market structure in geographically isolated markets that are exposed to large demand shocks. The temporal variation in market size allows us to overcome the classical endogeneity bias in standard concentration-performance regressions. We find evidence...

We study opaque selling using a unique dataset that matches hotel bookings made on opaque platforms (Priceline and Hotwire) with their counterparts in the transparent market. Controlling for hotel selection, opaque bookings provide 44% savings to consumers. The price variation across markets and...

We model the decision to travel across an international border as a trade-off between benefits derived from buying a range of products at lower prices and the costs of travel. Using micro-data on Canada-US travel, we structurally estimate this model. Price differences motivate cross-border...