IDEAS home Printed from https://ideas.repec.org/p/mtl/montde/8560.html
   My bibliography  Save this paper

Expanding the Informativeness of the Price System with Law

Author

Listed:
  • Boyer, M.
  • Laffont, J.J.

Abstract

We Consider in This Paper the Revelation of Quality Through Prices in a Competitive Equilibrium When the Consumers, Which Are All Similar, Do Not Observe Quality Before Buying But Have Rational Expectations About It Conditional on the Price They Observe. We Are Particularly Interested by the Emergence of Fraud in a Rational Expectations Competitive Equilibrium, That Is by the Possibility That Firms Will Sell a Low Q Quality Product While Announcing It As a High Quality Product. We Explicitly Consider the Cost of Fraud in the Form of a Legal Penalty to Be Paid, But Only If Someone Is Convicted of Fraud; Firms Selling the Low Quality Good Will Differ Across Their Probability of Conviction If They Engage in Fraud.

Suggested Citation

  • Boyer, M. & Laffont, J.J., 1985. "Expanding the Informativeness of the Price System with Law," Cahiers de recherche 8560, Universite de Montreal, Departement de sciences economiques.
    • Handle: RePEc:mtl:montde:8560
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mtl:montde:8560. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sharon BREWER (email available below). General contact details of provider: https://edirc.repec.org/data/demtlca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.