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Information unraveling revisited: disclosure of horizontal attributes
- 1.0439519 - NHU-C 2015 RIV GB eng J - Journal Article
Celik, Levent
Information unraveling revisited: disclosure of horizontal attributes.
Journal of Industrial Economics. Roč. 62, č. 1 (2014), s. 113-136. ISSN 0022-1821. E-ISSN 1467-6451
Grant - others:UK(CZ) UNCE 204005/2012
Institutional support: PRVOUK-P23
Keywords : product quality * competition
Subject RIV: AH - Economics
Impact factor: 1.039, year: 2014
This paper analyzes in a spatial framework how much information a seller discloses about the variety he sells when he faces a buyer with a privately known taste for variety. I identify an equilibrium in which, for each possible variety, the seller’s optimal strategy consists of either fully disclosing the variety or disclosing how far it is from the buyer’s expected taste. The set of varieties the seller fully discloses monotonically expands as the buyer’s taste for variety becomes stronger. I show that this is the unique undefeated equilibrium. From a policy perspective, mandating full disclosure is socially harmful.
Permanent Link: http://hdl.handle.net/11104/0244318
Number of the records: 1