Transparency, price-dependent demand and product variety
This paper revisits the relationship between transparency on the consumer side and product variety. We show that due to lower price-cost margins more transparency is welfare-improving. This result is achieved even though product variety may be reduced.
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- Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
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