Pricing Strategy versus Heterogeneous Shopping Behavior under Market Price Dispersion

Figure 1

Responses in optimal price and (expected) profits to changes in cost , price mean , and market size . From blue to red as cost and price mean increase within the range of analysis and with parameter values as in the benchmark case (, ); see Table 1.

(a) Prices versus as increases

(b) Profits versus as increases

(c) Prices versus as increases

(d) Profits versus as increases