A model of price adjustment

Diamond, Peter A.

doi:10.1016/0022-0531(71)90013-5

Cited by 1,245 publications

(842 citation statements)

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“…It could be argued that informed natives know the prices charged for identical products by different sellers and always go to low-priced stores, while uninformed tourists shop at random (Salop and Stiglitz, 1977). Indeed, if individuals must incur search costs (Diamond, 1971) to obtain information, then the market equilibrium may be characterized by price dispersion (Stiglitz, 1979;Carlton and Perloff, 2005).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

The Impact of Inbound Demand on Price Levels in Tourism Municipalities: Empirical Evidence from Catalonia

2011

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It is usually argued that tourism exerts negative economic impacts in host jurisdictions through the increase in prices linked to increasing demand for basic services and goods from tourists. This paper surveys 149 products in 45 tourism and non-tourism jurisdictions in Catalonia (which represent a total of 18,500 prices) in order to test empirically several hypotheses related to differences in price levels in tourism and non-tourism jurisdictions. The main results show that prices in tourism jurisdictions are not significantly higher than those in non-tourism ones. The analysis suggests that tourists are likely to pay higher prices than natives for some products.

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Section: Theoretical Frameworkmentioning

confidence: 99%

The Impact of Inbound Demand on Price Levels in Tourism Municipalities: Empirical Evidence from Catalonia

2011

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“…Sa théorie n'examine qu'un seul côté du marché et si l'on veut étudier l'équilibre du marché il convient de formaliser aussi le comportement des producteurs. Fisher (1970) et Winter (1971 proposent des modèles qui conduisent à un prix d'équilibre concurrentiel 4 , tandis que Diamond (1971) et Rothschild (1970 construisent des modèles qui conduisent eux au prix monopolistique ou à un prix compris entre le prix concurrentiel et le prix monopolistique. En effet, dans ce cas, les firmes savent que les consommateurs ont du mal à obtenir l'information et exploitent la force de marché que cela leur confère.…”

Section: Asymétrie D'information Et Structure Des Marchésunclassified

La théorie économique de l’information : exposé synthétique de la littérature

García

2009

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Le présent article fournit un exposé synthétique de la riche littérature sur l’économie de l’information. L’introduction situe la théorie économique de l’information dans la théorie économique générale et la définit par rapport au modèle des marchés contingents de Arrow-Debreu. Trois sections intitulées : Asymétrie d’information et structure des marchés, Transmission d’information par les prix et Information asymétrique et échange, analysent les principaux articles et leurs résultats. En conclusion, on aborde le thème de la valeur de l’information, on présente les caractéristiques de l’information en tant que bien et on souligne le défi que représente son intégration dans un modèle d’équilibre général.This paper attempts to give an integrated view of the numerous contributions to economic theory of information. After an introduction where the economics of information is placed within the context of general economic theory and defined relative to the Arrow-Debreu contingent market model, the paper reviews in three sections, entitled Asymetric information and Market Structure, Information revealed by prices, and Asymetric information and exchange, the core articles and their main results. The paper concludes with the value of information, its characteristics as a good, and the challenge of integrating it into a general equilibrium model

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“…The seminal paper by Diamond (1971) assumes that consumers do not know the prices of firms, having to visit different stores, only purchasing when a price below a given cutoff price is found. Prices will be adjusted to a unique equilibrium price in finite time, namely the monopoly price.…”

Section: Related Literaturementioning

confidence: 99%