IDEAS home Printed from https://ideas.repec.org/a/spr/joecth/v19y2002i3p493-507.html
   My bibliography  Save this article

Rationing rule, imperfect information and equilibrium

Author

Listed:
  • Roger Waldeck

    (Ecole Nationale Supérieure des Télécommunications de Bretagne, Département d'Economie, Technopôle de Brest Iroise, BP 832, 29285 Brest Cédex, FRANCE)

Abstract

The impact of imperfect information on the price setting behaviour of firms is analysed. Specifically, consumers support an information cost to become informed about prices. Firms are endowed with U-shaped average cost curves. If a firm does not supply more than its competitive supply as determined by its marginal cost schedule, then we show that the existence of a pure strategy equilibrium is conditional on the rationing rule employed. If uninformed consumers are served first then the monopoly price is the sole equilibrium whenever consumers' information costs are high enough. Otherwise, a pure strategy equilibrium fails to exist contrary to the results of Salop and Stiglitz (1977) or Braverman (1980) who implicitly suppose that firms supply all the demand at a given price.

Suggested Citation

  • Roger Waldeck, 2002. "Rationing rule, imperfect information and equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 19(3), pages 493-507.
    • Handle: RePEc:spr:joecth:v:19:y:2002:i:3:p:493-507
    Note: Received: May 17, 1999; revised version: September 15, 2000
    as

    Download full text from publisher

    File URL: http://link.springer.de/link/service/journals/00199/papers/2019003/20190493.pdf
    Download Restriction: Access to the full text of the articles in this series is restricted
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Pricing; Imperfect information; Rationing rule; Search theory; Pure strategy equilibrium.;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joecth:v:19:y:2002:i:3:p:493-507. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.