High profit equilibria in directed search models

B-Tier
Journal: Games and Economic Behavior
Year: 2011
Volume: 71
Issue: 1
Pages: 224-234

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We consider a model of directed search where the sellers are allowed to post mechanisms with entry fees. Regardless of the number of buyers and sellers, the sellers are able to extract all the surplus of the buyers by introducing entry fees and making price schedules positively sloped in the number of buyers arriving to their shops. This is in contrast to results that are achieved for large markets under the assumption that sellers cannot influence the utility of any particular buyer (market utility assumption), in which case buyers obtain strictly positive rents. If there is a bound on the prices or on the entry fees that can be charged, then the equilibrium with full rent extraction does not exist any more, and the market utility assumption is restored for large markets.

Technical Details

RePEc Handle
repec:eee:gamebe:v:71:y:2011:i:1:p:224-234
Journal Field
Theory
Author Count
1
Added to Database
2026-01-29