Finitely repeated search and the diamond paradox

Arthur Fishman

doi:10.1016/j.econlet.2021.109933

Finitely repeated search and the diamond paradox

Arthur Fishman

Department of Economics and Business Administration

Research output: Contribution to journal › Article › peer-review

Abstract

The Diamond paradox (Diamond, 1971) asserts that in a market for a homogeneous good, if all consumers have positive search costs and search sequentially, then the unique equilibrium price is the monopoly price. I show that any finitely repeated version of this search game may support competitive prices.

Original language	English
Article number	109933
Journal	Economics Letters
Volume	205
DOIs	https://doi.org/10.1016/j.econlet.2021.109933
State	Published - Aug 2021

Keywords

Diamond paradox
Finitely repeated games
Sequential search

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10.1016/j.econlet.2021.109933

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Finitely repeated search and the diamond paradox

Abstract

Keywords

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