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Discounts and Deadlines in Consumer Search / Dominic Coey, Bradley Larsen, Brennan Platt.
- Format:
- Book
- Author/Creator:
- Coey, Dominic.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w22038.
- NBER working paper series no. w22038
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2016.
- Summary:
- We present a new equilibrium search model where consumers initially search among discount opportunities, but are willing to pay more as a deadline approaches, eventually turning to full-price sellers. The model predicts equilibrium price dispersion and rationalizes discount and full-price sellers coexisting without relying on ex-ante heterogeneity. We apply the model to online retail sales via auctions and posted prices, where failed attempts to purchase a good reveal consumers' reservation prices. We find robust evidence supporting the theory, and demonstrate that ignoring buyer deadlines can distort estimates of market welfare, consumer demand, and underlying causes of market shifts.
- Notes:
- Print version record
- February 2016.
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