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

American Economic Review: Vol. 102 No. 3 (May 2012)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

Understanding Price Controls and Nonprice Competition with Matching Theory

Article Citation

Hatfield, John William, Charles R. Plott, and Tomomi Tanaka. 2012. "Understanding Price Controls and Nonprice Competition with Matching Theory." American Economic Review, 102(3): 371-75.

DOI: 10.1257/aer.102.3.371

Abstract

We develop a quality competition model to understand how price controls affect market outcomes in buyer-seller markets with discrete goods of varying quality. While competitive equilibria do not necessarily exist in such markets when price controls are imposed, we show that stable outcomes do exist and characterize the set of stable outcomes in the presence of price restrictions. In particular, we show that price controls induce non-price competition: price floors induce the trade of inefficiently high quality goods, while price ceilings induce the trade of inefficiently low quality goods.

Article Full-Text Access

Full-text Article

Authors

Hatfield, John William (Stanford U)
Plott, Charles R. (CA Institute of Technology)
Tanaka, Tomomi (AZ State U)

JEL Classifications

C78: Bargaining Theory; Matching Theory
L51: Economics of Regulation


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us