A theory of search with deadlines and uncertain recall
Equilibrium search, Uncertain recall, Deadlines, Price posting, Reservation prices
We ask how the ability to recall past prices affects the dynamics of search and price formation. In the model, buyers have limited time to purchase a good and face uncertainty regarding the availability of past price quotes in the future. Sellers cannot observe a potential buyer’s remaining time until deadline nor her quote history, and hence post prices that weigh the probability of sale versus the profit once sold. We find that, in contrast to conventional wisdom, reducing the consumer’s recall ability may actually improve his expected utility because it lowers the average expected price in the market and reduces the duration of search.
Original Publication Citation
“A Theory of Search with Deadlines and Uncertain Recall,” by S. Nuray Akin and Brennan Platt. Economic Theory, 55:101-133, January 2014.
BYU ScholarsArchive Citation
Akin, S. Nuray and Platt, Brennan C., "A theory of search with deadlines and uncertain recall" (2014). Faculty Publications. 5787.
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