Business, Management and Accounting
4 years ago

Inflation boosts monopoly power and entry in tech-savvy search markets.

SSRN Electronic Journal
Inflation, Price Competition, and Consumer Search Technology
Makoto Watanabe

Paper Summary

The article explores how inflation and consumer search technology affect pricing and competition in markets. Efficient search technologies lead to more intense price competition among firms. Surprisingly, inflation can increase firms' monopoly power and encourage new firms to enter these markets. This research sheds light on how firms set prices in response to these factors.

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