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 …

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 …

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 …

vertical quality (e.g., consumer satisfaction) that is signaled via price softens price competition, and that imperfect … do). We show that low-quality firms always prefer playing the incomplete information game to the full-information analog …: their prices are higher and so are their profits. Moreover, for "high-value" markets, if the proportion of high-quality …