Arbeitspapier
Overhead cost, price randomization, and price stickiness
This paper investigates price setting when firms produce with increasing returns and customers are imperfectly informed about prices but customers can search. It is shown that there exists a unique randomization equilibrium where each customer is offered a random price by each firm known to him. If the number of firms is fixed then the expected price to be paid by a customer responds countercyclically to variations of demand per customer and it remains invariant with respect to variations of the number of customers. This price behavior corresponds well with new evidence on price behavior.
- Language
-
Englisch
- Bibliographic citation
-
Series: Diskussionsbeiträge - Serie I ; No. 273
- Classification
-
Wirtschaft
- Subject
-
increasing returns
price stickiness
search
- Event
-
Geistige Schöpfung
- (who)
-
Zink, Helmut
- Event
-
Veröffentlichung
- (who)
-
Universität Konstanz, Fakultät für Wirtschaftswissenschaften und Statistik
- (where)
-
Konstanz
- (when)
-
1994
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Zink, Helmut
- Universität Konstanz, Fakultät für Wirtschaftswissenschaften und Statistik
Time of origin
- 1994
Other Objects (12)
Ramsey Prices, Average Cost Prices and Price Sustainability
International overhead cost sharing
Holiday price regidity and cost of price adjustment
Holiday Price Rigidity and Cost of Price Adjustment
Endogenous Costs and Price-Cost Margins
Prices vs. Quantities with Endogenous Cost Structure
Industrial concentration, price-cost margins, and innovation
Prices vs. quantities with endogenous cost structure
Price versus Quantity Competition with Cost Sharing
Cost-price relationships in a concentrated economy
Small Price Changes, Sales Volume, and Menu Cost
Holiday Non-Price Rigidity and Cost of Adjustment
Ramsey Prices, Average Cost Prices and Price Sustainability
International overhead cost sharing
Holiday price regidity and cost of price adjustment
Holiday Price Rigidity and Cost of Price Adjustment
Endogenous Costs and Price-Cost Margins
Prices vs. Quantities with Endogenous Cost Structure
Industrial concentration, price-cost margins, and innovation
Prices vs. quantities with endogenous cost structure
Price versus Quantity Competition with Cost Sharing
Cost-price relationships in a concentrated economy
Small Price Changes, Sales Volume, and Menu Cost
Holiday Non-Price Rigidity and Cost of Adjustment
Ramsey Prices, Average Cost Prices and Price Sustainability
International overhead cost sharing
Holiday price regidity and cost of price adjustment
Holiday Price Rigidity and Cost of Price Adjustment
Endogenous Costs and Price-Cost Margins
Prices vs. Quantities with Endogenous Cost Structure
Industrial concentration, price-cost margins, and innovation
Prices vs. quantities with endogenous cost structure
Price versus Quantity Competition with Cost Sharing
Cost-price relationships in a concentrated economy
Small Price Changes, Sales Volume, and Menu Cost