Results
Title

Immobility, Rationing and Price Competition.

Authors

Peters, Michael

Abstract

A model is studied where firms advertise prices and buyers play a noncooperative search game in an attempt to secure output from firms at the advertised prices. Firms face rising marginal costs and may not be willing to supply everything demanded at their price if they wind up with many buyers. It is shown that rationing will occur in equilibrium no matter how averse buyers are to this possibility. The result is specialised to a case where rationing occurs with probability one. The equilibrium price and outputs are characterised for this case.

Subjects

BUSINESS enterprises; PRICING; DIRECT costing; RATIONING; ECONOMIC equilibrium; PRICES; COST; MATHEMATICAL models; EQUILIBRIUM; PURCHASING agents

Publication

Review of Economic Studies, 1985, Vol 52, Issue 4, p593

ISSN

0034-6527

Publication type

Academic Journal

DOI

10.2307/2297734