Search Costs and Equilibrium Price Dispersion in Auctions

摘要: A leading explanation for price dispersion in posted-price markets is search costs. We incorporate this insight into a model of competing second-price auctions similar to eBay. By doing so, we extend the narrow literature on capture dispersion, and grow already large include auctions. provide evidence costs using data collected from eBay, identifying by exploiting discontinuity visibility due eBay’s tool. 1 thank Aaron Bodoh-Creed, Greg Lewis, Steve Tadelis, various seminar participants helpful comments, Nate Woody programming assistance, Cornell University Institute Social Sciences financial support. The views expressed herein are solely those authors do not necessarily reflect U.S. Department Justice.