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Please use this identifier to cite or link to this item:
http://hdl.handle.net/10016/5318
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| Title: | A Theory of Commerce |
| Author(s): | Faig, Miquel
Jerez, Belén [mjerez] |
| Publisher: | Elsevier |
| Issued date: | 2005 |
| Citation: | Journal of Economic Theory. 2005, vol. 122, nº 1, p. 60-99 |
| URI: | http://hdl.handle.net/10016/5318 |
| ISSN: | 0022-0531 |
| DOI: | http://dx.doi.org/10.1016/j.jet.2004.04.002 |
| Abstract: | The theory of commerce advanced here captures prominent features of retail trade: large employment, congestion effects, anonymous posted prices, and quantity discounts. This theory is built around a directed search model where buyers’ preferences are private information. The analytical solution is easily inserted in a Neoclassical growth framework. In this framework, the parameters of retail trade are calibrated using commercial margins and employment. Welfare properties depend on the sellers’ ability to charge two-tier prices. With two-tier prices, the directed search equilibrium is efficient. Otherwise, it is not. This contrasts with the full information benchmark, where directed search is always efficient. |
| Sponsor: | Financial support from SSHRC of Canada (Grant 410010028) and DGCYT of Spain (projects BEC2002-00642,BEC2000-01 72 and HI2001-0039) is gratefully acknowledged. |
| Review: | PeerReviewed |
| Publisher version: | http://dx.doi.org/10.1016/j.jet.2004.04.002 |
| Keywords: | Retail trade
Directed search
Ex ante price offers
Private information |
| JEL Classification: | D43
D82
D83
E1 |
| Rights: | ©Elsevier |
| Appears in Collections: | Economists Online
DE - Artículos de Revistas
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