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Published April 1982 | public
Journal Article

A generalized model of pricing for homogeneous goods under imperfect information

Abstract

This paper generalizes the model developed in Wilde and Schwartz (1979) to allow downward sloping demand curves and u-shaped average cost curves. It shows that the basic qualitative conclusions of Wilde and Schwartz still hold. Moreover, it shows that the critical proportion of comparison shoppers needed to generate a competitive equilibrium falls as demand becomes more elastic or average costs become more inelastic. Finally, it shows that when imperfect information generates non-competitive outcomes, they are bounded below, in welfare terms, by the monopolistically competitive equilibrium.

Additional Information

© 1982 The Society for Economic Analysis Limited. First version received June 1981; final version accepted November 1981 (Eds.). Formerly SSWP 386.

Additional details

Created:
August 19, 2023
Modified:
October 17, 2023