Stable Price Dispersion under Heterogeneous Buyer Consideration
Abstract
ABSTRACT We study the pricing of homogeneous products sold to customers who consider different sets of suppliers. We identify prices that are stable in the sense that no firm wishes to undercut a rival or to raise its price when rivals are able to respond by offering special deals. We derive stable and dispersed prices across several price‐consideration specifications. We contrast the implications against those of conventional approaches.
Fields of Study & Subjects
Merger and Competition Analysis
Consumer Market Behavior and Pricing
Supply Chain and Inventory Management
Publication details
- Journal / source
- The RAND Journal of Economics
- Publisher
- Wiley
- Volume
- 57
- Issue
- 1
- Pages
- 103–121
- Publication date
- 19 January 2026
- Language
- EN