This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window
Open in New Tab
Open in same window
American Economic Review: Vol. 101 No. 4 (June 2011)
AER Volume. 101, Issue 4 | 
Previous ArticleNext Article
Sign up for Email Alerts Follow us on Twitter
AER Forthcoming Articles
Full-text Article
Online Appendix (174.77 KB)
Previous ArticleNext Article
Expand
Quick Tools:
Print Article Summary Email Link to this Article Export CitationSign up for Email Alerts Follow us on Twitter
Explore:
AER Forthcoming Articles
Information and Prices with Capacity Constraints
Article Citation
Lester, Benjamin. 2011. "Information and Prices with Capacity Constraints."
American Economic Review,
101(4): 1591-1600.
DOI: 10.1257/aer.101.4.1591
DOI: 10.1257/aer.101.4.1591
Abstract
In the theoretical literature on consumer search, one conclusion is nearly universal: as buyers become better able to observe and compare prices ex ante, sellers will set lower prices in equilibrium. In this paper, I examine a standard consumer search model with one small -- yet often relevant -- additional restriction: I assume that sellers are capacity constrained. In this environment, I illustrate that the conventional wisdom regarding information and prices does not necessarily hold: having more informed consumers can lead to a decrease in prices, have no effect at all, or even lead to an increase in prices.
Article Full-Text Access
Full-text Article
Additional Materials
Online Appendix (174.77 KB)
Authors
Lester, Benjamin (U Western Ontario)
JEL Classifications
D11: Consumer Economics: Theory
D83: Search; Learning; Information and Knowledge; Communication; Belief
L11: Production, Pricing, and Market Structure; Size Distribution of Firms
D83: Search; Learning; Information and Knowledge; Communication; Belief
L11: Production, Pricing, and Market Structure; Size Distribution of Firms
