Attraction versus Persuasion: Information Provision in Search Markets

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Tác giả: Pak Hung Au, Mark Whitmeyer

Ngôn ngữ: eng

Ký hiệu phân loại: 016 Bibliographies and catalogs of works on specific subjects or in specific disciplines

Thông tin xuất bản: 2018

Mô tả vật lý:

Bộ sưu tập: Báo, Tạp chí

ID: 161806

We consider a model of oligopolistic competition in a market with search frictions, in which competing firms with products of unknown quality advertise how much information a consumer's visit will glean. In the unique symmetric equilibrium of this game, the countervailing incentives of attraction and persuasion yield a payoff function for each firm that is linear in the firm's realized effective value. If the expected quality of the products is sufficiently high (or competition is sufficiently fierce), this corresponds to full information--firms provide the first-best level of information. If not, this corresponds to information dispersion--firms randomize over signals.
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