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Transparency and product variety

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  • Schultz, Christian

Abstract

We study long run effects of transparency on the consumer side in a differentiated market. Only some consumers know prices. Increasing transparency reduces the equilibrium price, profit and firm entry. This improves welfare and, in most cases, average consumer utility.

Suggested Citation

  • Schultz, Christian, 2009. "Transparency and product variety," Economics Letters, Elsevier, vol. 102(3), pages 165-168, March.
    • Handle: RePEc:eee:ecolet:v:102:y:2009:i:3:p:165-168
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    Citations

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    Cited by:

    1. Yiquan Gu & Tobias Wenzel, 2017. "Consumer confusion, obfuscation and price regulation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(2), pages 169-190, May.
    2. Gu, Yiquan & Wenzel, Tobias, 2011. "Transparency, price-dependent demand and product variety," Economics Letters, Elsevier, vol. 110(3), pages 216-219, March.
    3. Gu, Yiquan & Wenzel, Tobias, 2012. "Transparency, entry, and productivity," Economics Letters, Elsevier, vol. 115(1), pages 7-10.
    4. Wan, Xing & Chen, Jing & Chen, Bintong, 2020. "Exploring service positioning in platform-based markets," International Journal of Production Economics, Elsevier, vol. 220(C).
    5. Fischer, Christian & Rasch, Alexander & Wenzel, Tobias, 2020. "Complex pricing and consumer-side attention," ZEW Discussion Papers 20-075, ZEW - Leibniz Centre for European Economic Research.
    6. Belleflamme, Paul & Peitz, Martin, 2019. "Price disclosure by two-sided platforms," International Journal of Industrial Organization, Elsevier, vol. 67(C).
    7. Xu, Lili & Matsumura, Toshihiro, 2023. "Market transparency in a mixed oligopoly," MPRA Paper 118415, University Library of Munich, Germany.
    8. Karakoç, Gülen & Pagnozzi, Marco & Piccolo, Salvatore, 2022. "The value of transparency in dynamic contracting with entry," International Journal of Industrial Organization, Elsevier, vol. 85(C).
    9. Rasch, Alexander & Herre, Jesko, 2013. "Customer-side transparency, elastic demand, and tacit collusion under differentiation," Information Economics and Policy, Elsevier, vol. 25(1), pages 51-59.
    10. Fischer, Christian & Rasch, Alexander, 2018. "Complex pricing and consumer-side transparency," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181642, Verein für Socialpolitik / German Economic Association.
    11. Schultz, Christian, 2014. "Consumer poaching, brand switching, and price transparency," Economics Letters, Elsevier, vol. 123(3), pages 266-269.
    12. Aurélien Nioche & Basile Garcia & Thomas Boraud & Nicolas Rougier & Sacha Bourgeois-Gironde, 2019. "Interaction effects between consumer information and firms' decision rules in a duopoly: how cognitive features can impact market dynamics," Palgrave Communications, Palgrave Macmillan, vol. 5(1), pages 1-11, December.
    13. Francisco Martínez Sánchez, 2016. "Collusion, Customization and Transparency," Working Papers. Serie AD 2016-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    14. Elisa Baraibar‐Diez & María D. Odriozola & José Luis Fernández Sánchez, 2017. "A Survey of Transparency: An Intrinsic Aspect of Business Strategy," Business Strategy and the Environment, Wiley Blackwell, vol. 26(4), pages 480-489, May.

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    More about this item

    Keywords

    Market transparency Product differentiation Product variety Competition policy;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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