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Asymmetric information and overinvestment in quality
Belleflamme, Paul; Peitz, Martin - 2009
In a standard adverse selection world, asymmetric information about product quality leads to quality deterioration in the market. Suppose that a higher investment level makes the realization of high quality more likely. Then, if consumers observe the investment (but not the realization of...
Persistent link: https://www.econbiz.de/10010264613
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Vertical product differentiation when quality is unobservable to buyers
Orosel, Gerhard O.; Zauner, Klaus G. - 2004
We analyze vertical product differentiation in a model where a good's quality is unobservable to buyers before purchase, a continuum of quality levels is technologically feasible, and minimum quality is supplied under competitive conditions. After purchase the true quality of the good is...
Persistent link: https://www.econbiz.de/10010261256
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The End of Tourist Traps : A Natural Experiment on the Impact of Tripadvisor on Quality Upgrading
Donati, Dante - 2022
Asymmetric information can distort market outcomes. I study how the online disclosure of information affects consumers’ behavior and firms’ incentives to upgrade product quality in markets where information is traditionally limited. I first build a model of consumer search with firms’...
Persistent link: https://www.econbiz.de/10014080609
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Spin Doctors : A Model and an Experimental Investigation of Vague Disclosure
Deversi, Marvin - 2018
interval that contains her actual type. Theory predicts that when facing a possibly naive receiver, the sender discloses an …, disclosure. Both theory and experimental data further suggest that imposing precision improves overall information transmission …
Persistent link: https://www.econbiz.de/10012908648
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Limited Attention in the Housing Market : Threshold Effects of Energy-Performance Certificates on Property Prices and Energy-Efficiency Investments
Sejas-Portillo, Rodolfo; Comerford, David; Moro, Mirko; … - 2021
containing information about sale price, property and location characteristics, and a mandatory energy performance certificate … (ranging from green A to red G). Applying a Regression Discontinuity Design (RDD), we document significant price … band increases the final sale price of a property between 0.8% and 2.5% ($2,000 and $6,625 based on average sale prices …
Persistent link: https://www.econbiz.de/10013315011
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The End of Tourist Traps: A Natural Experiment on the Impact of Tripadvisor on Quality Upgrading
Donati, Dante - 2022
Asymmetric information can distort market outcomes. I study how the online disclosure of information affects consumers' behavior and firms' incentives to upgrade product quality in markets where information is traditionally limited. I first build a model of consumer search with firms' endogenous...
Persistent link: https://www.econbiz.de/10013353446
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Diagnostic Uncertainty and Insurance Coverage in Credence Goods Markets
Balafoutas, Loukas; Fornwagner, Helena; Kerschbamer, Rudolf - 2021
framework. We test the model’s predictions in a laboratory experiment. Both in theory and in the experiment diagnostic … uncertainty decreases the rate of efficient service provision and leads to less trade. In theory, insurance also decreases the …
Persistent link: https://www.econbiz.de/10013314966
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Who should pay for certification?
Stahl, Konrad O.; Strausz, Roland - 2011
Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer or the seller? Our answer - the seller - follows from a nontrivial analysis revealing a clear intuition. Buyer-induced certification acts as an inspection device,...
Persistent link: https://www.econbiz.de/10010274805
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Signaling and Employer Learning with Instruments
Aryal, Gaurab - 2020
The social and the private returns to education differ when education can increase productivity, and also be used to signal productivity. We show how instrumental variables can be used to separately identify and estimate the social and private returns to education within the employer learning...
Persistent link: https://www.econbiz.de/10012841583
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Learning and Information Transmission within Multinational Corporations
Chen, Cheng - 2020
We propose that multinational firms learn about their profitability in a particular market by observing their performance in nearby markets. We first develop a model of firm expectations formation with noisy signals from multiple markets and derive predictions on expectations formation and...
Persistent link: https://www.econbiz.de/10012825991