Equilibrium search (1989)
AuthorsHogan, Seamus D.show all
This thesis is concerned with the problem of incorporating consumer search in to equilibrium-in particular with the relationship between oligopoly models where consumers search and those which assume perfect information.
Two chapters consider duality in search. The conventional way of expressing a consumer's search strategy is to describe his decision variable as a function of the search cost. The dual approach is to find the search cost that leaves the consumer just indifferent between two decisions. Since cost is continuous this search-cost function is differentiable in more parameters than its inverse and so more readily yields comparative static results. Using this function it is possible to express the demand facing firms as explicit functions of the distribution of consumers search costs.
The belief is commonly expressed in the literature that adaptive search models add little insight compared to the analytically simpler