Firm-Specific Information, Product Differentiation, and Industry Equilibrium
AbstractWhere consumers have imperfect i nformation about specific firms' prices and lack information about the market, f irms have informational market power. In general, improving the consumers' infor mation about each firm's price will not necessarily lower the average market pri ce. The authors show however that certain types ofimprovements will lower price. Moreover a reduction in barriers to entry (e.g., capital costs) will lower pri ce, holding information constant. Where a significant number (but not all), cons umers have perfect information, single-price equilibria are impossible. Copyright 1986 by Royal Economic Society.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 38 (1986)
Issue (Month): 0 (Suppl. Nov.)
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Other versions of this item:
- Perloff, Jeffrey M & Salop, Steven, 1985. "Firm-specific information, product differentiation, and industry equilibrium," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt60v9q47r, Department of Agricultural & Resource Economics, UC Berkeley.
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- Baylis, Kathy & Perloff, Jeffrey M., 2001.
"Price Dispersion on the Internet: Good Firms and Bad Firms,"
Institute for Research on Labor and Employment, Working Paper Series
qt2t0770rn, Institute of Industrial Relations, UC Berkeley.
- Kathy Baylis & Jeffrey Perloff, 2002. "Price Dispersion on the Internet: Good Firms and Bad Firms," Review of Industrial Organization, Springer, vol. 21(3), pages 305-324, November.
- Thomas A Abbott III, 1992. "Price Dispersion In U.S. Manufacturing: Implications For The Aggregation Of Products And Firms," Working Papers 92-3, Center for Economic Studies, U.S. Census Bureau.
- Thomas A Abbott Iii, 1989. "Price Dispersion in U.S. Manufacturing," Working Papers 89-7, Center for Economic Studies, U.S. Census Bureau.
- Dennis W. Carlton & Jeffrey M. Perloff, 1989.
"The Economics of Information,"
Food Marketing Policy Center Research Reports
005, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
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