Quality Uncertainty with Imperfect Information Acquisition
Gertz C (2014) Center for Mathematical Economics Working Papers; 487.
Bielefeld: Center for Mathematical Economics.
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| Veröffentlicht | Englisch
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IMW_working_paper_487.pdf
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Autor*in
Gertz, Christopher
Abstract / Bemerkung
We analyze a monopolistic model of quality uncertainty but
with the possibility of information acquisition on the consumer side. Infor-
mation is costly and its amount is chosen by the consumer. The analysis of
Bayesian equilibria shows the possibility of three equilibrium classes, only one
of which leaves positive utility to the consumer. The classic adverse selection
results of these markets are weakened in this situation. We show that cheaper
information does not necessarily benefit the consumer but can instead rule
out the buyer-friendly and welfare maximizing equilibria. Moreover, making
quality search arbitrarily efficient does not lead to sure selling of the high
quality product. A sustainable adverse selection effect, though weaker than
in the classical model, remains even in the limit.
Stichworte
Quality uncertainty;
Price signaling;
Adverse selection;
Information acquisition;
Two-sided incomplete information
Erscheinungsjahr
2014
Serientitel
Center for Mathematical Economics Working Papers
Band
487
Seite(n)
49
ISSN
0931-6558
Page URI
https://pub.uni-bielefeld.de/record/2901454
Zitieren
Gertz C. Quality Uncertainty with Imperfect Information Acquisition. Center for Mathematical Economics Working Papers. Vol 487. Bielefeld: Center for Mathematical Economics; 2014.
Gertz, C. (2014). Quality Uncertainty with Imperfect Information Acquisition (Center for Mathematical Economics Working Papers, 487). Bielefeld: Center for Mathematical Economics.
Gertz, Christopher. 2014. Quality Uncertainty with Imperfect Information Acquisition. Vol. 487. Center for Mathematical Economics Working Papers. Bielefeld: Center for Mathematical Economics.
Gertz, C. (2014). Quality Uncertainty with Imperfect Information Acquisition. Center for Mathematical Economics Working Papers, 487, Bielefeld: Center for Mathematical Economics.
Gertz, C., 2014. Quality Uncertainty with Imperfect Information Acquisition, Center for Mathematical Economics Working Papers, no.487, Bielefeld: Center for Mathematical Economics.
C. Gertz, Quality Uncertainty with Imperfect Information Acquisition, Center for Mathematical Economics Working Papers, vol. 487, Bielefeld: Center for Mathematical Economics, 2014.
Gertz, C.: Quality Uncertainty with Imperfect Information Acquisition. Center for Mathematical Economics Working Papers, 487. Center for Mathematical Economics, Bielefeld (2014).
Gertz, Christopher. Quality Uncertainty with Imperfect Information Acquisition. Bielefeld: Center for Mathematical Economics, 2014. Center for Mathematical Economics Working Papers. 487.
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