Influence of Informed Buyers in Markets Susceptible to the Lemons Problem
AbstractIt is shown that the presence of informed buyers is necessary but not always sufficient for producers to use prices as signals of product quality. A sufficiently high fraction of informed buyers eliminates the lemons problem. A small fraction of informed buyers mitigates the lemons problem, provided that buyers' prior belief of high quality is sufficiently pessimistic: price reveals high quality at a signaling cost which increases with market power. However, if buyers' prior belief of high quality is optimistic when the market is poorly informed, then the lemons problem is not overcome. Copyright 2004, Oxford University Press.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.
Volume (Year): 86 (2004)
Issue (Month): 3 ()
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Dubois, Pierre & Nauges, Céline, 2010.
"Identifying the effect of unobserved quality and expert reviews in the pricing of experience goods: Empirical application on Bordeaux wine,"
International Journal of Industrial Organization,
Elsevier, vol. 28(3), pages 205-212, May.
- Dubois, P. & Nauges, C., 2006. "Identifying the effect of unobserved quality and experts' reviews in the pricing of experience goods : empirical application on Bordeaux wine," Economics Working Paper Archive (Toulouse) 200607, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
- Dubois, Pierre & Nauges, Celine, 2007. "Identifying the Effect of Unobserved Quality and Expert Reviews in the Pricing of Experience Goods: Empirical Application on Bordeaux Wine," Working Papers 37320, American Association of Wine Economists.
- Dubois, Pierre & Nauges, Céline, 2006. "Identifying the Effect of Unobserved Quality and Experts' Reviews in the Pricing of Experience Goods: Empirical Application on Bordeaux Wine," IDEI Working Papers 395, Institut d'Économie Industrielle (IDEI), Toulouse.
- Giovanni Mastrobuoni & Franco Peracchi & Aleksey Tetenov, 2012.
"Price as a signal of product quality: Some experimental evidence,"
EIEF Working Papers Series
1214, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2012.
- Giovanni Mastrobuoni & Franco Peracchi & Aleksey Tetenov, 2012. "Price as a signal of product quality: some experimental evidence," Carlo Alberto Notebooks 268, Collegio Carlo Alberto, revised 2013.
- Teuber, Ramona, 2011. "Protecting Geographical Indications: Lessons learned from the Economic Literature," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116081, European Association of Agricultural Economists.
- Chengyan Yue & StÃ©phan Marette & John C. Beghin, 2006.
"How to Promote Quality Perception in Wine Markets: Brand Advertising or Geographical Indication?,"
Center for Agricultural and Rural Development (CARD) Publications
06-wp426, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Chengyan Yue & StÃ©phan Marette & John C. Beghin, 2006. "How to Promote Quality Perception in Wine Markets: Brand Advertising or Geographical Indication?," Food and Agricultural Policy Research Institute (FAPRI) Publications 06-wp426, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
- Yue, Chengyan & Marette, Stephan & Beghin, John C., 2006. "How to Promote Quality Perception in Wine Markets: Brand Advertising or Geographic Indication?," 2006 Annual meeting, July 23-26, Long Beach, CA 21310, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Gill, David & Sgroi, Daniel, 2008. "The Optimal Choice of Pre-launch Reviewer : How Best to Transmit Information using Tests and Conditional Pricing," The Warwick Economics Research Paper Series (TWERPS) 877, University of Warwick, Department of Economics.
- Tauber, Ramona & Anders, Sven & Langinier, Corinne, 2011. "The Economics of Geographical Indications: Welfare Implications," Working Papers 103262, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.