G2TT
来源类型FEEM working papers "Note di lavoro" series
规范类型论文
Price Competition with Information Disparities in a Vertically Differentiated Duopoly
Alberto Cavaliere
发表日期2004
出处Economy and Society
出版年2004
语种英语
摘要In this paper we extend the model of vertical product differentiation to also consider information disparities about the extent of quality differences. Equilibrium prices turn out to depend not only on the share of informed consumers but also on uninformed consumers beliefs about quality differences. If uninformed consumers overestimate vertical differentiation, informed consumers exert a positive externality on the purchasers of the high quality good as its price decreases when the share of informed consumers decreases. Considering also that the price of the low quality good increases with the share of informed consumers, higher prices can-not signal high quality goods. If uninformed consumers have pessimistic beliefs and underestimate the extent of vertical differentiation, informed consumers can exert a positive externality on firms. In fact either market demands are inelastic to prices and the profits of the high quality firm increase with the share of informed consumers or market demands are elastic to prices and the profits of both firms increase with the share of informed consumers. In the latter case prices are also equal to those that would prevail with perfect information. In the case of optimistic consumers we can then find some theoretical foundation concerning the fact that information undermines brand, while with pessimistic consumers we can explain demand collapses and insensitivity to price changes due to consumer suspicions about product quality.
特色分类L13,L15
关键词Vertical product differentiation,Asymmetric information,Quality uncertainty,Prices as quality signals
URLhttps://www.feem.it/en/publications/feem-working-papers-note-di-lavoro-series/price-competition-with-information-disparities-in-a-vertically-differentiated-duopoly/
来源智库Fondazione Eni Enrico Mattei (Italy)
资源类型智库出版物
条目标识符http://119.78.100.153/handle/2XGU8XDN/116991
推荐引用方式
GB/T 7714
Alberto Cavaliere. Price Competition with Information Disparities in a Vertically Differentiated Duopoly. 2004.
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