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Multiplicity of equilibria in search markets with free entry and exit
Multiplicity of equilibria in search markets with free entry and exit
Pereira, P.
(2005),
"Multiplicity of equilibria in search markets with free entry and exit", International Journal of Industrial Organization, 23(5/6), 325-339.
Resumo:
In this paper, I show that there may be multiple equilibria in search markets with production cost heterogeneity, if firms may enter or exit the industry. I provide a monotonicity property, which is necessary and sufficient for uniqueness. Multiplicity vanishes as the search cost gets small. Multiple equilibria can be ranked by welfare.
Keywords:
Search; Multiplicity of equilibria; Coordination failure
