This paper develops a theoretical foundation for the undercut-proof equilibrium (see Shy, 1996, 2002; Morgan and Shy, 2013). In a general spatial setting, the set of undercut-proof prices is equivalent the core of a non-transferable utility cooperative-game, played on the set of outcomes that are feasible in Bertrand competition. The result depends critically on two conditions: First, firms mus...

This paper proposes a model in which identical sellers of a homogenous product compete in both prices and price frames (i.e., ways to present price information). We model price framing by assuming that firms’ frame choices affect the comparability of their price offers: consumers may fail to compare prices due to frame differentiation, and due to frame complexity. In the symmetric equilibrium t...

We present an equilibrium search model that parsimoniously rationalizes the use of auctions as a sales mechanism for new-in-box goods—a frequent occurrence in online retail markets—and analyze whether the existence of these auctions is welfare enhancing relative to a market consisting only of posted prices. Buyers have a deadline by which the good must be purchased, and sellers choose between a...

We study network formation with n players and link cost α > 0. After the network is built, an adversary randomly deletes one link according to a certain probability distribution. Cost for player v incorporates the expected number of players to which v will become disconnected. We focus on unilateral link formation and Nash equilibrium. We show existence of Nash equilibria and a price of stabili...

This paper is the first to examine the effect of minimum price guarantees in a sequential search model. Minimum price guarantees are not advertised and only known to consumers when they come to the shop. We show that in such an environment, minimum price guarantees increase the value of buying the good and therefore increase consumers’ reservation prices. This increase is so large that even aft...

This study aims to estimate the function of copper consumption using the Johansen approach in time series data, between 1991-2011 in Iran. The literature review of specialized consumption and demand functions shows factors influencing the consumption of copper including copper price variables, aluminum price as a substitute commodity, oil price as a complementary commodity, and industrializatio...

This paper proposes a model in which identical sellers of a homogenous product compete in both prices and price frames (i.e., ways to present price information). We model price framing by assuming that firms’ frame choices affect the comparability of their price offers: consumers may fail to compare prices due to frame differentiation, and due to frame complexity. In the symmetric equilibrium t...

We have carried out a thorough study on the existence of discrete fixed points and applications. As a result, we establish several general existence theorems of fixed and zero points on a broad class of subsets of the integer lattice Z and also on arbitrary discrete sets. Most results have their well-known continuous counterparts. One of the major conditions is that of locally gross direction p...

We show that for a specific class of random matching Edgeworthian economies, the expectation of the limiting equilibrium price coincides with the equilibrium price of the related Walrasian economies. This result extends to the study of economies in the presence of uncertainty within the multi-period Arrow-Debreu model, allowing to understand the dynamics of how beliefs survive and propagate thr...