Finitely repeated search and the diamond paradox

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The Diamond paradox (Diamond, 1971) asserts that in a market for a homogeneous good, if all consumers have positive search costs and search sequentially, then the unique equilibrium price is the monopoly price. I show that any finitely repeated version of this search game may support competitive prices.

Original languageEnglish
Article number109933
JournalEconomics Letters
StatePublished - Aug 2021


  • Diamond paradox
  • Finitely repeated games
  • Sequential search

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


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