We present a diagrammatic and step-by-step analysis of price signaling quality. Because quality is a continuum on the … equilibrium. We first study the behavior of the monopoly when price conveys information about quality. We then show the effect of …

conveys full information about the quality of the good to uninformed buyers. Deceiving the uninformed buyers by charging a … high price and mimicking a high quality is not profitable when the competitive fringe is large enough. Since a higher price … effect of asymmetric information and learning on the equilibrium outcomes. More uninformed buyers increases the price …

conveys full information about the quality of the good to uninformed buyers. Deceiving the uninformed buyers by charging a … high price and mimicking a high quality is not profitable when the competitive fringe is large enough. Since a higher price … effect of asymmetric information and learning on the equilibrium outcomes. More uninformed buyers increases the price …

valuations for quality but by image concerns. A typical monopoly outcome is a two-tier product line resembling a "masstige …This paper analyzes optimal product lines when consumers differ both in their taste for quality and in their desire for …" strategy as observed in luxury goods markets. Products can have identical quality and differ only in price and image, thereby …

-quantity pairs in each period. The quality of the product is initially unknown, and more information is generated through … consumers' beliefs about product quality, and characterize the changes in prices and quantities resulting from information …-valuation buyers from the market, even if the product's underlying quality is in fact high …

In a monopoly setting where consumers cannot observe the quality of the product we show that free samples which are of … a lower quality than the marketed digital goods are used together with high prices as signals for a superior quality if … the number of informed consumers is small and if the difference between the high and the low quality is not too small …

In this paper we study optimal price setting by a seller that offers a supposedly higher-quality product in a market … where a good of standard quality is already available. Consumers do not directly observe the quality of the product and … attribute - quality or price - that stands out in the market. We show that separation takes place only if the salience bias is …