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dc.contributor.author | Janssen, Maarten |
dc.contributor.author | Shelegia, Sandro |
dc.contributor.other | Universitat Pompeu Fabra. Departament d'Economia i Empresa |
dc.date.accessioned | 2020-05-25T09:26:56Z |
dc.date.available | 2020-05-25T09:26:56Z |
dc.date.issued | 2018-03-20 |
dc.identifier | https://econ-papers.upf.edu/ca/paper.php?id=1605 |
dc.identifier.citation | |
dc.identifier.uri | http://hdl.handle.net/10230/44725 |
dc.description.abstract | This paper studies vertical relations in a search market. As the wholesale arrangement between a manufacturer and its retailers is typically unobserved by consumers, their beliefs about who is to be blamed for a price deviation play a crucial role in determining wholesale and retail prices. The common assumption in the consumer search literature is that consumers exclusively blame an individual retailer for a price deviation. We show that in the vertical relations context, predictions based on this assumption are not robust in the sense that if consumers assign just a small probability to the event that the upstream manufacturer is responsible for the deviation, equilibrium predictions are qualitatively dierent. For the robust beliefs, the vertical model can explain a variety of observations, such as retail price rigidity (or, alternatively, low cost pass-through), non-monotonicity of retail prices in search costs, and (seemingly) collusive retail behavior. The model can be used to study a monopoly online platform that sells access to final consumers. |
dc.format.mimetype | application/pdf |
dc.language.iso | eng |
dc.relation.ispartofseries | Economics and Business Working Papers Series; 1605 |
dc.rights | L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons |
dc.rights.uri | http://creativecommons.org/licenses/by-nc-nd/3.0/es/ |
dc.title | Beliefs and consumer search in a vertical industry |
dc.title.alternative | |
dc.type | info:eu-repo/semantics/workingPaper |
dc.date.modified | 2020-05-25T09:25:35Z |
dc.subject.keyword | vertical relations |
dc.subject.keyword | consumer search |
dc.subject.keyword | double marginalization |
dc.subject.keyword | product differentiation |
dc.subject.keyword | price rigidities |
dc.subject.keyword | Business Economics and Industrial Organization |
dc.rights.accessRights | info:eu-repo/semantics/openAccess |