IDEAS home Printed from https://ideas.repec.org/a/bla/randje/v50y2019i4p854-882.html

A model of biased intermediation

Author

Listed:
  • Alexandre de Cornière
  • Greg Taylor

Abstract

We study situations in which consumers rely on a biased intermediary's advice when choosing among sellers. We introduce the notion that sellers' and consumers' payoffs can be congruent or conflicting, and show that this has important implications for the effects of bias. Under congruence, the firm benefiting from bias has an incentive to offer a better deal than its rival and consumers can be better‐off than under no bias. Under conflict, the favored firm offers lower utility, and bias harms consumers. We study various policies for dealing with bias and show that their efficacy also depends on whether the payoffs exhibit congruence or conflict.

Suggested Citation

  • Alexandre de Cornière & Greg Taylor, 2019. "A model of biased intermediation," RAND Journal of Economics, RAND Corporation, vol. 50(4), pages 854-882, December.
    • Handle: RePEc:bla:randje:v:50:y:2019:i:4:p:854-882
    DOI: 10.1111/1756-2171.12298
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1756-2171.12298
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1756-2171.12298?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

    Statistics

    Access and download statistics

    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:bla:randje:v:50:y:2019:i:4:p:854-882. 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/randdus.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.