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This paper empirically investigates the pricing strategy of a firm in a market where many firms sell the same product with similar costs.We use the heterogeneity in buyers’ search costs to explain why a firm in such a market offers periodic price discounts,even when its supply cost is stable.We propose a full equilibrium approach treating the distributions of selling prices and quantity sales as equilibrium outcomes.We adopt a maximum empirical likelihood approach to estimate the model from observed prices and sales data to recover the non-parametric distribution of buyers’ search costs.We assume that buyers may use either non-sequential or sequential search strategy.We demonstrate that using the sales quantity information in addition to pricing information benefits the estimation of both the non-sequential and sequential search models.In particular,the additional sales information allow us to estimate the search cost distribution non-parametrically in the sequential search model,and also make the estimates more robust in the non-sequential search model.Estimation results suggest that buyers in our data search prices in a sequential manner,as the sequential search model out-performs the nonsequential search model in terms of fitting with the observed price distributions and the true supply costs.Lastly,we conduct a counter-factual exercise to illustrate how lower consumer search costs may be supported by higher market prices in equilibrium in our proposed model.