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Competitive Search with Ex-post Opportunism

Author

Listed:
  • Pere Gomis-Porqueras

    (Deakin University)

  • Benoit Julien

    (UNSW Australia)

  • Liang Wang

    (University of Hawaii Manoa)

Abstract

We consider a frictional market where buyers are uncoordinated and sellers cannot commit ex-ante to either a per-unit price or quantity of a divisible good. Sellers then can exploit their local monopoly power by adjusting prices or quantities once the local demand is realized. We find that when sellers can adjust quantities ex-post, there exists a unique symmetric equilibrium where the increase in the buyer-seller ratio leads to higher quantities and prices in equilibrium. When sellers post ex-ante quantities and adjust prices ex-post, a symmetric equilibrium does not exist.

Suggested Citation

  • Pere Gomis-Porqueras & Benoit Julien & Liang Wang, 2016. "Competitive Search with Ex-post Opportunism," Working Papers 201607, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:201607
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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_16-07R.pdf
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    References listed on IDEAS

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    Cited by:

    1. Randall Wright & Philipp Kircher & Benoit Julîen & Veronica Guerrieri, 2017. "Directed Search: A Guided Tour," NBER Working Papers 23884, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Competitive Search; Price Posting; Quantity Posting;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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    This paper has been announced in the following NEP Reports:

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