Quality choice, signalling, and moral hazard
AbstractIn this paper it is argued that prices should not reveal the quality of the good to the consumers, when there is asymmetric information about quality between the firm and the consumers, and the firm can affect the quality of its product. Instead, prices should be completely uninformative, so that firms are able to make larger investments to improve the quality, and increase the expected utility of the consumers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Finnish Economic Association in its journal Finnish Economic Papers.
Volume (Year): 3 (1990)
Issue (Month): 2 (Autumn)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Mikko Mustonen, 2005. "Signalling cost with investment in compatibility," Netnomics, Springer, vol. 7(1), pages 39-57, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Editorial Secretary).
If references are entirely missing, you can add them using this form.