determinant of the feasibility of such signaling. A firm may use price alone as a signal, or price and quality together. Both …If a product has two dimensions of quality, one observable and one not, a firm can use observable quality as a signal … of unobservable quality. The correlation between consumers' valuation of high quality in each dimension is a key …

determinant of the feasibility of such signaling. A firm may use price alone as a signal, or price and quality together. Both …If a product has two dimensions of quality, one observable and one not, a firm can use observable quality as a signal … of unobservable quality. The correlation between consumers' valuation of high quality in each dimension is a key …

Firms signal high quality through high prices even if the market structure is highly competitive and price competition … is severe. In a symmetric Bertrand oligopoly where products may differ only in their quality, production cost is … increasing in quality and the quality of each firm’s product is private information (not known to consumers or to other firms …

Firms signal high quality through high prices even if the market structure is highly competitive and price competition … is severe. In a symmetric Bertrand oligopoly where products may differ only in their quality, production cost is … increasing in quality and the quality of each firm’s product is private information (not known to consumers or to other firms …

quality can be signaled by high prices is based on the assumption that higher quality necessarily incurs higher production … cost. In this paper, the authors argue that firms producing high-quality products have a stronger incentive to lower the … marginal cost of production cost because they can then sell larger quantities than low-quality firms can. If this dynamic …

quality can be signaled by high prices is based on the assumption that higher quality necessarily incurs higher production … cost. In this paper, the author argues that firms producing high-quality products have a stronger incentive to lower the … marginal cost of production cost because they can then sell larger quantities than low-quality firms can. If this dynamic …

Economists have emphasized the role of dissipative advertising and price as signals of quality. Most works, however …, limit the number of types to two options: high and low quality. Yet, production costs and quality both result from R … quality and marginal cost are both subject to chance. In a static framework (no repeat purchases and no informed consumers …

We consider an oligopolistic market where firms compete in price and quality and where consumers are heterogeneous in … knowledge: some consumers know both the prices and quality of the products offered, some know only the prices and some know …-inefficiency of the price/quality offers. But, better price/quality combinations are signalled with lower prices in one type and with …

Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer …

Consider a two-product firm that decides on the quality of each product. Product quality is unknown to consumers. If … the firm sells both products under the same brand name, consumers adjust their beliefs about quality subject to the … performance of both products. We show that if the probability that low quality will be detected is in an intermediate range, the …