Renault, Régis; Anderson, Simon P. - Université Paris-Dauphine (Paris IX) - 2009
Improved consumer information about horizontal aspects of products of similar quality leads to better consumer matching … but also to higher prices, so consumer surplus can go up or down, while profits rise. With enough quality asymmetry …, though, the higher-quality (and hence larger) firm's price falls with more information, so both effects benefit consumers …