Consumer Information and Firm Pricing: Negative Externalities from Improved Information

This file is part of IDEAS, which uses RePEc data

Consumer Information and Firm Pricing: Negative Externalities from Improved Information

Author Info

Simon P. Anderson ()
Regis Renault ()

Additional information is available for the following registered author(s):

Abstract

We analyze the effect of consumer information on firm pricing in a model where consumers search for prices and matches with products. We consider two types of consumers. Uninformed consumers do not know in advance their match values with firms, whereas informed consumers do. Prices are lower the greater the proportion of uninformed consumers. Hence uninformed consumers exert a positive externality on the others, in contrast to standard results. This leads to socially excessive investment in gathering prior information when aggregate demand is price-sensitive.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info
Paper provided by University of Virginia, Department of Economics in its series Virginia Economics Online Papers with number 338.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 37 pages
Date of creation: Feb 1997
Date of revision:
Handle: RePEc:vir:virpap:338

Contact details of provider:
Web page: http://www.virginia.edu/economics/home.html

For technical questions regarding this item, or to correct its listing, contact: (Debby Stanford).

Related research
Keywords:

Other versions of this item:

Article
- Anderson, Simon P & Renault, Regis, 2000. "Consumer Information and Firm Pricing: Negative Externalities from Improved Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(3), pages 721-42, August.

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Anthony Creane, 2008. "A note on welfare-improving ignorance about quality," Economic Theory, Springer, vol. 34(3), pages 585-590, March. [Downloadable!] (restricted)
Simon P. Anderson & Regis Renault, 2006. "Advertising Content," American Economic Review, American Economic Association, vol. 96(1), pages 93-113, March. [Downloadable!] (restricted)
Other versions:
- Anderson, Simon P & Renault, Régis, 2005. "Advertising Content," CEPR Discussion Papers 5064, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Simon P. Anderson & Régis Renault, 2002. "Advertising Content," Virginia Economics Online Papers 362, University of Virginia, Department of Economics. [Downloadable!]
Simon P. Anderson & Régis Renault, 2006. "comparative Advertising," THEMA Working Papers 2006-18, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise. [Downloadable!]
Simon P. Anderson & Regis Renault, 1999. "Pricing, product diversity, and search costs: a Bertrand-Chamberlin-Diamond model," Virginia Economics Online Papers 335, University of Virginia, Department of Economics. [Downloadable!]
Other versions:
- Anderson, S.P. & Renault, R., 1997. "Pricing, Product Diversity and Search Costs: A Bertrand-Chamberlin-Diamond Model," Papers 97.481, Toulouse - GREMAQ.
- Simon P. Anderson & Regis Renault, 1999. "Pricing, Product Diversity, and Search Costs: A Bertrand-Chamberlin-Diamond Model," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 719-735, Winter. [Downloadable!] (restricted)
Galeotti, Andrea, 2005. "Consumers networks and search equilibria," Working Papers 1225, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
Other versions:
- Andrea Galeotti, 2004. "Consumers Networks and Search Equilibria," Tinbergen Institute Discussion Papers 04-075/1, Tinbergen Institute. [Downloadable!]
Ian McCarthy, 2008. "Advertising Intensity and Welfare in an Equilibrium Search Model," Caepr Working Papers 2008-003, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington. [Downloadable!]
José Luis Moraga-González & Zsolt Sándor & Matthijs R. Wildenbeest, 2008. "Nonparametric Estimation of the Costs of Non-Sequential Search," Tinbergen Institute Discussion Papers 07-102/1, Tinbergen Institute. [Downloadable!]
Other versions:
- Jose Luis Moraga-Gonzalez & Zsolt Sandor & Matthijs R. Wildenbeest, 2007. "Nonparametric Estimation of the Costs of Non-Sequential Search," Working Papers 2007-20, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy. [Downloadable!]
Maria Arbatskaya & Hideo Konishi, 2005. "Referrals in Search Markets," Boston College Working Papers in Economics 614, Boston College Department of Economics, revised 19 Jun 2008. [Downloadable!]
Other versions:
- Maria Arbatskaya & Hideo Konishi, 2005. "Referrals in Search Markets," Emory Economics 0521, Department of Economics, Emory University (Atlanta). [Downloadable!]
John Kennes & Aaron Schiff, 2006. "Informational Intermediation and Competing Auctions," Discussion Papers 06-02, University of Copenhagen. Department of Economics. [Downloadable!]

Statistics

Access and download statistics

Did you know? The most prolific authors have over 400 items listed on IDEAS.

This page was last updated on 2008-8-24.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.