Finitely repeated search and the diamond paradox

摘要

The Diamond paradox (Diamond, 1971) asserts that in a market for a homogeneous good, if all consumers have positive search costs and search sequentially, then the unique equilibrium price is the monopoly price. I show that any finitely repeated version of this search game may support competitive prices. (C) 2021 Elsevier B.V. All rights reserved.