We model firms’ quality disclosure and pricing in the presence of cursed consumers, who fail to be sufficiently … skeptical about undisclosed quality. We show that neither competition nor the presence of sophisticated consumers necessarily … protect cursed consumers from being exploited. Exploitation arises if markets are vertically differentiated, if there are few …

We model firms' quality disclosure and pricing in the presence of cursed consumers, who fail to be sufficiently … skeptical about undisclosed quality. We show that cursed consumers are exploited in duopoly markets if firms are vertically … differentiated, if there are few cursed consumers, and if average product quality is high. Three common consumer protection policies …

We model firms’ quality disclosure and pricing in the presence of cursed consumers, who fail to be sufficiently … skeptical about undisclosed quality. We show that cursed consumers are exploited in duopoly markets if firms are vertically … differentiated, if there are few cursed consumers, and if average product quality is high. Three common consumer protection policies …

We model firms' quality disclosure and pricing in the presence of cursed consumers, who fail to be sufficiently … skeptical about undisclosed quality. We show that neither competition nor the presence of sophisticated consumers necessarily … protect cursed consumers from being exploited. Exploitation arises if markets are vertically differentiated, if there are few …

improves consumer information and increases the intensity of price competition …

to more disclosure but depends on the level of competition in the market. Conversely, increasing competition does not …

This paper studies the incentives for interim voluntary disclosure of verifiable information in probabilistic all … strong-form disclosure principle is robust with respect to correlation, partitional evidence, randomized disclosures …

that competition between senders positively affects disclosure of information and receivers' welfare. …The theory of voluntary disclosure of information posits that market forces lead senders to disclose information … adverse inferences about non-disclosed information. Previous research finds that receivers do not sufficiently infer non-disclosure …