The social value of information on product quality

In the context of a seller with private information about product quality, I show that revelation of information on product quality is sometimes, but not always, socially valuable. When it is socially valuable, there is generally a tradeoff between the acquisition and revelation of finer, but more costly information and the revelation of coarser, but less costly information. As a result, it can be socially optimal for firms to reveal only coarse private information.

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Year of publication:	2014
Authors:	Corts, Kenneth S.
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 122.2014, 2, p. 140-143
Publisher:	Elsevier
Subject:	Social welfare \| Private information \| Learning

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010743725