Directed search, coordination failure and seller profits: an experimental comparison of posted pricing with single and multiple prices.

Anbarci, N.; Feltovich, N.

Abstract

We experimentally examine posted pricing and directed search. In one treatment, capacity‐constrained sellers post fixed prices, which buyers observe before choosing whom to visit. In the other, firms post both “single‐buyer” (applied when one buyer visits) and “multibuyer” (when multiple buyers visit) prices. We find, based on a 2 × 2 (two buyers and two sellers) market and a follow‐up experiment with 3 urn:x-wiley:00206598:iere12020:equation:iere12020-math-0001 and 2 × 3 markets, that multibuyer prices can be lower than single‐buyer prices or prices in the one‐price treatment. Also, allowing the multibuyer price does not affect seller profits and increases market frictions.

Citation

Anbarci, N., & Feltovich, N. (2013). Directed search, coordination failure and seller profits: an experimental comparison of posted pricing with single and multiple prices. International Economic Review, 54(3), 873-884. https://doi.org/10.1111/iere.12020

• Journal Article Type: Article
• Online Publication Date: Jul 17, 2013
• Publication Date: 2013-08
• Deposit Date: Aug 17, 2018
• Journal: International Economic Review
• Print ISSN: 0020-6598
• Electronic ISSN: 1468-2354
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 54
• Issue: 3
• Pages: 873-884
• DOI: https://doi.org/10.1111/iere.12020
• Public URL: https://durham-repository.worktribe.com/output/1351573