We model the idea that when consumers search for products, they first visit the firms which advertise more, or the firms whose advertising is more salient. Equilibrium prices and advertising efforts are increasing in consumer search costs. By contrast, equilibrium profits are nonmonotonic in search costs so firms are not necessarily better off if search costs rise. In our model, firms are engag...

This study focuses on one of the most effective type of capacity markets named Capacity Subscription (CS) market which is predicted to be widely used in the upcoming smart grids. Despite variant researches done about the mechanism and structure of capacity markets, their performances have been rarely tested in the presence of network constraints. Considering this deficiency, we tried to propose...

Abstract This article develops a discrete choice model of demand with optimal sequential consumer search. Consumers first choose product to search; then, once they learn the utility get from searched product, whether buy it or keep searching. We characterize search problem as standard and propose parametric cost distribution that generates closed-form expressions for probability purchasing prod...

One important issue of exchange rate pass-through is the extent to which exchange rate changes affect the prices. This paper studied the pass-through effect of movements in the RMB nominal exchange rate on consumer prices. In particular, we examined whether the exchange rate pass-through to consumer prices was complete or not, and the impact of exchange rate system reform had on the pass-throug...

Increased access to individual customers and their purchase histories has led to a growth in targeted promotions, including the practice of offering different pricing policies to prospective, as opposed to current, customers. Prior research on targeted promotions has adopted a tenet of the standard economic theory of choice, whereby what a consumer chooses depends exclusively on the prices avai...

The welfare effects of price discrimination in the market for airfare can be ambiguous: price discrimination can increase airline revenue, but it can also allow for a more efficient allocation of tickets. This paper examines the market for airfare with a structural model of consumer search. My model features sophisticated consumers with rational beliefs about future price movements. Consumers i...

OBJECTIVE Analyze the implementation of drug price regulation policy by the Drug Market Regulation Chamber. METHODS This is an interview-based study, which was undertaken in 2012, using semi-structured questionnaires with social actors from the pharmaceutical market, the pharmaceuticals industry, consumers and the regulatory agency. In addition, drug prices were compiled based on surveys cond...

Economists know how to calculate optimal prices for electricity transmission. These are rarely applied in practice. This paper develops a thirteen node model, based on the transmission system in England and Wales, incorporating losses and transmission constraints. It is solved with optimal prices, and with uniform prices for demand and for generation, but re-dispatching to take account of trans...