arXiv subjects

Brian C. Albrecht

Publications and source records attributed to Brian C. Albrecht.

3 recordsLinked to original sources

arXiv2026

Pass-through with Price Dispersion

How do cost shocks pass through to prices in markets with price dispersion? We decompose the problem into two layers. In the competition layer, consumers' consideration sets determine equilibrium distributions of normalized margins. In the curvature layer, demand elasticity maps these margins into prices and pass-through rates. We prove the pricing game is strategically equivalent to a game over normalized margins, so equilibrium margin distributions are invariant to demand and costs. This separation yields closed-form pass-through formulas at each quantile of the price distribution, robust bounds across demand specifications, and sharp comparative statics linking market structure to incidence.

econ.TH↗

arXiv2026

Chaos and Misallocation under Price Controls

Price controls kill the incentive for arbitrage. We prove a Chaos Theorem: under a binding price ceiling, suppliers are indifferent across destinations, so arbitrarily small cost differences can determine the entire allocation. The economy tips to corner outcomes in which some markets are fully served while others are starved; small parameter changes flip the identity of the corners, generating discontinuous welfare jumps. These corner allocations create a distinct source of cross-market misallocation, separate from the aggregate quantity loss (the Harberger triangle) and from within-market misallocation emphasized in prior work. They also create an identification problem: welfare depends on demand far from the observed equilibrium. We derive sharp bounds on misallocation that require no parametric assumptions. In an efficient allocation, shadow prices are equalized across markets; combined with the adding-up constraint, this collapses the infinite-dimensional welfare problem to a one-dimensional search over a common shadow price, with extremal losses achieved by piecewise-linear demand schedules. Calibrating the bounds to station-level AAA survey data from the 1973--74 U.S. gasoline crisis, misallocation losses range from roughly 1 to 9 times the Harberger triangle.

econ.GN↗

arXiv2023

Comparison Shopping: Learning Before Buying From Duopolists

We explore a model of duopolistic competition in which consumers learn about the fit of each competitor's product. In equilibrium, consumers comparison shop: they learn only about the relative values of the products. When information is cheap, increasing the cost of information decreases consumer welfare; but when information is expensive, this relationship flips. As information frictions vanish, there is a limiting equilibrium that is ex post efficient.

econ.TH↗