Equilibrium price dispersion across and within stores

Abstract

for their comments. The views expressed in this paper are those of the authors and do not necessarily represent the views of the Federal Reserve Bank of Richmond or the Federal Reserve System. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Dynamic Bank Expansion: Spatial Growth, Financial Access, and Inequality

“…andMonte, Redding and Rossi-Hansberg (2018) develop models that emphasize spatial links in goods markets. Interestingly, even in the same geographic area, the prices of identical goods can differ significantly across stores and households(Kaplan and Menzio, 2015;Kaplan et al, 2019), and such patterns can be explained by search frictions in product markets(Menzio and Trachter, 2015;Kaplan and Menzio, 2016;Menzio and Trachter, 2018).21 As in, the quantitative implications of our model do not depend on whether the portfolio adjustment cost is specified in terms of consumption units or disutility.…”

Vertical Differentiation in Frictional Product Markets

“…The original versions of these models assume that sellers are homogeneous with respect to the quality of their product and their marginal cost. Some later versions of these models allow for seller heterogeneity with respect to either the quality of the product (see, e.g., Bontemps, Robin and Van den Berg 2000) or marginal cost (see, e.g., Menzio and Trachter 2018). Heterogeneity is, however, exogenous.…”

Instability of endogenous price dispersion equilibria: A simulation

“…() looked at cyclical variation in markups, Alessandria () and Herrenbrueck () modelled price dispersion in international trade, Head et al. () and Burdett and Menzio () showed that Burdett–Judd price dispersion can explain the pattern of price changes in the macroeconomy without resorting to ad‐hoc stickiness, Kaplan and Menzio () showed that differences in search behaviour between employed and unemployed workers contribute to aggregate fluctuations, Menzio and Trachter () and Kaplan et al. () studied price dispersion in retail and Burdett et al.…”