Macro shocks cause equilibrium price dispersion
De Meza, D.
& Reito, F.
(2021).
Macro shocks cause equilibrium price dispersion.
Economics Letters,
208,
https://doi.org/10.1016/j.econlet.2021.110082
& Reito, F.
(2021).
Macro shocks cause equilibrium price dispersion.
Economics Letters,
208,
https://doi.org/10.1016/j.econlet.2021.110082
Price dispersion is shown to arise when demand is stochastic, ex-ante identical competitive firms set price prior to the realization of uncertainty and ex-ante identical buyers cannot switch sellers if rationed.
