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Information Transmission in Regulated Markets

  • Carolyn Pitchik
  • Andrew Schotter

The seminal papers of Vincent P. Crawford and Joel Sobel (1982) and Jerry Green and Nancy Stokey (1980) study models in which a signal about the state of the world is transmitted from a perfectly informed sender to an uninformed receiver. The authors study a model in which multiple signalers compete for consumers. The authors ask how much information is revealed; how consumers' shopping around affects this information; and how each is affected by incentives? An implication of the model is that, in a price-regulated market for health care, patients should not be prohibited from gathering more than one opinion.

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 26 (1993)
Issue (Month): 4 (November)
Pages: 815-29

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Handle: RePEc:cje:issued:v:26:y:1993:i:4:p:815-29
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