search query: @author Wright, R. / total: 19
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| Author: | Mortensen, D. T. Wright, R. |
| Title: | Competitive pricing and efficiency in search equilibrium |
| Journal: | International Economic Review
2002 : FEB, VOL. 43:1, p. 1-20 |
| Index terms: | Pricing Economic efficiency Equilibrium theory |
| Language: | eng |
| Abstract: | The authors consolidate and generalize some results on price determination and efficiency in search equilibrium. Extending models by Rubinstein and Wlinsky and by Gale, heterogeneous buyers and sellers meet according to a general matching technology and prices are determined by a general bargaining condition. When the discount rate r and search costs converge to =, the authors show that prices in all exchanges are the same and equal the competitive, market clearing, price. Given positive search costs, efficiency obtains iff bargaining satisfies Hosios' condition and r=o. When prices are set by third-party market makers, however, the authors show that search equilibrium is necessarily efficient. |
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