We develop an equilibrium sequential search model which includes most of the literature as special cases. In particular, the model can accommodate heterogeneity in buyers’ search costs and demand functions and firms’ cost functions, with general demand and cost functions. We identify conditions which ensure existence of equilibrium in pure strategies, utilizing recent progress in the theory of large games by Khan and Sun. These conditions elucidate the essential structure of equilibrium search models. Although we focus on sequential search, our methodology can be used for other classes of equilibrium search models as well.
Research and Publications
Journal Articles
Nonstandard Foundations of Equilibrium Search Models
2007, Journal of Economic Theory
Michael T. Rauh
Abstract
Citation
Rauh, Michael T. (2007), "Nonstandard Foundations of Equilibrium Search Models,'' Journal of Economic Theory, Vol. 132, No.1, pp. 518-529.
Keywords
Search; Equilibrium search models; Nonstandard analysis
