MULTIPRODUCT EQUILIBRIUM PRICE DISPERSION

The model of Burdett and Judd (Econometrica 51 (1993), 955-969) is generalized to the case of many goods. Consumers choose the best price observed for each good. There are two classes of equilibria, those that involve constant expected profits for each good independently of price and those with increasing profits for each good in price. A continuum of the latter type always exists. These equilibria are qualitatively different than the unique equilibrium of the single-good case. (C) 1995 Academic Press, Inc.