IDEAS home Printed from https://ideas.repec.org/a/eee/indorg/v16y1997i1p43-61.html
   My bibliography  Save this article

Price signals quality: The case of perfectly inelastic demand

Author

Listed:
  • Ellingsen, Tore

Abstract

No abstract is available for this item.

Suggested Citation

  • Ellingsen, Tore, 1997. "Price signals quality: The case of perfectly inelastic demand," International Journal of Industrial Organization, Elsevier, vol. 16(1), pages 43-61, November.
  • Handle: RePEc:eee:indorg:v:16:y:1997:i:1:p:43-61
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167-7187(96)01040-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cooper, Russell & Ross, Thomas W., 1985. "Monopoly provision of product quality with uninformed buyers," International Journal of Industrial Organization, Elsevier, vol. 3(4), pages 439-449, December.
    2. Mailath George J. & Okuno-Fujiwara Masahiro & Postlewaite Andrew, 1993. "Belief-Based Refinements in Signalling Games," Journal of Economic Theory, Elsevier, vol. 60(2), pages 241-276, August.
    3. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, December.
    4. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
    5. Bagwell, Kyle & Staiger, Robert W., 1989. "The role of export subsidies when product quality is unknown," Journal of International Economics, Elsevier, vol. 27(1-2), pages 69-89, August.
    6. Bagwell, Kyle, 1991. "Optimal Export Policy for a New-Product Monopoly," American Economic Review, American Economic Association, vol. 81(5), pages 1156-1169, December.
    7. Bester, Helmut, 1988. " Qualitative Uncertainty in a Market with Bilateral Trading," Scandinavian Journal of Economics, Wiley Blackwell, vol. 90(3), pages 415-434.
    8. Gene M. Grossman & Henrik Horn, 1988. "Infant-Industry Protection Reconsidered: The Case of Informational Barriers to Entry," The Quarterly Journal of Economics, Oxford University Press, vol. 103(4), pages 767-787.
    9. Bagwell, Kyle & Riordan, Michael H, 1991. "High and Declining Prices Signal Product Quality," American Economic Review, American Economic Association, vol. 81(1), pages 224-239, March.
    10. Kenneth L. Judd & Michael H. Riordan, 1994. "Price and Quality in a New Product Monopoly," Review of Economic Studies, Oxford University Press, vol. 61(4), pages 773-789.
    11. Overgaard, Per Baltzer, 1993. "Price as a signal of quality : A discussion of equilibrium concepts in signalling games," European Journal of Political Economy, Elsevier, vol. 9(4), pages 483-504, November.
    12. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 179-221.
    13. Asher Wolinsky, 1983. "Prices as Signals of Product Quality," Review of Economic Studies, Oxford University Press, vol. 50(4), pages 647-658.
    14. Cho, In-Koo & Sobel, Joel, 1990. "Strategic stability and uniqueness in signaling games," Journal of Economic Theory, Elsevier, vol. 50(2), pages 381-413, April.
    15. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    16. Yuk-Shee Chan & Hayne Leland, 1982. "Prices and Qualities in Markets with Costly Information," Review of Economic Studies, Oxford University Press, vol. 49(4), pages 499-516.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adriani, Fabrizio & Deidda, Luca G., 2011. "Competition and the signaling role of prices," International Journal of Industrial Organization, Elsevier, vol. 29(4), pages 412-425, July.
    2. Bureau, J.-C. & Gozlan, E. & Marette, S., 1999. "Quality Signaling and International Trade in Food Products," Papers 99-13, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
    3. Veronica Guerrieri & Robert Shimer, 2018. "Markets with Multidimensional Private Information," American Economic Journal: Microeconomics, American Economic Association, vol. 10(2), pages 250-274, May.
    4. Bester, Helmut & Ritzberger, Klaus, 2001. "Strategic pricing, signalling, and costly information acquisition," International Journal of Industrial Organization, Elsevier, vol. 19(9), pages 1347-1361, November.
    5. Janssen, Maarten C.W. & Roy, Santanu, 2010. "Signaling quality through prices in an oligopoly," Games and Economic Behavior, Elsevier, vol. 68(1), pages 192-207, January.
    6. Moraga-Gonzalez, Jose Luis, 2000. "Quality uncertainty and informative advertising," International Journal of Industrial Organization, Elsevier, vol. 18(4), pages 615-640, May.
    7. Chenavaz Régis, 2017. "Better Product Quality May Lead to Lower Product Price," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 17(1), pages 1-22, January.
    8. J. M. Crespi & S. Marette, 1999. "Cartel stability and suality signalling," THEMA Working Papers 99-29, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    9. Fabian Herweg & Daniel Müller, 2016. "Overconfidence in the Markets for Lemons," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(2), pages 354-371, April.
    10. Palazzo, Francesco, 2017. "Search costs and the severity of adverse selection," Research in Economics, Elsevier, vol. 71(1), pages 171-197.
    11. Andrew F. Daughety & Jennifer F. Reinganum, 2013. "Economic analysis of products liability: Theory," Chapters, in: Jennifer H. Arlen (ed.), Research Handbook on the Economics of Torts, chapter 3, pages 69-96, Edward Elgar Publishing.
    12. Ferreira, Daniel & Nikolowa, Radoslawa, 2017. "Adverse Selection and Assortative Matching in Labor Markets," CEPR Discussion Papers 11869, C.E.P.R. Discussion Papers.
    13. Adriani, Fabrizio & Deidda, Luca & Sonderegger, Silvia, 2009. "The Role of Financial Intermediaries in Securities Issues: A Theoretical Analysis," MPRA Paper 16112, University Library of Munich, Germany.
    14. Mark Voorneveld & Jörgen W. Weibull, 2011. "A Scent of Lemon—Seller Meets Buyer with a Noisy Quality Observation," Games, MDPI, vol. 2(1), pages 1-24, March.
    15. Adriani, Fabrizio & Deidda, Luca G., 2009. "Price signaling and the strategic benefits of price rigidities," Games and Economic Behavior, Elsevier, vol. 67(2), pages 335-350, November.
    16. Ellingsen, Tore & Rydqvist, Kristian, 1997. "The Stock Market as a Screening Device and the Decision to Go Public," SSE/EFI Working Paper Series in Economics and Finance 174, Stockholm School of Economics.
    17. Gertz, Christopher, 2016. "Quality Uncertainty with Imperfect Information Acquisition," Center for Mathematical Economics Working Papers 487, Center for Mathematical Economics, Bielefeld University.
    18. Dana, James D., 2020. "Bundling can signal high quality," International Journal of Industrial Organization, Elsevier, vol. 69(C).
    19. F. Adriani & LG Deidda, 2006. "The Monopolist's Blues," Working Paper CRENoS 200611, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    20. Andersson, Fredrik, 2002. "Pooling reputations," International Journal of Industrial Organization, Elsevier, vol. 20(5), pages 715-730, May.
    21. Dmitry Shapiro & Seung Huh, 2021. "Incentives of low‐quality sellers to disclose negative information," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(1), pages 81-99, February.
    22. Gertz, Christopher, 2016. "A Model of Quality Uncertainty with a Continuum of Quality Levels," Center for Mathematical Economics Working Papers 522, Center for Mathematical Economics, Bielefeld University.
    23. Ellingsen, Tore & Johannesson, Magnus, 2005. "Sunk costs and fairness in incomplete information bargaining," Games and Economic Behavior, Elsevier, vol. 50(2), pages 155-177, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adriani, Fabrizio & Deidda, Luca G., 2011. "Competition and the signaling role of prices," International Journal of Industrial Organization, Elsevier, vol. 29(4), pages 412-425, July.
    2. Moraga-Gonzalez, Jose Luis, 2000. "Quality uncertainty and informative advertising," International Journal of Industrial Organization, Elsevier, vol. 18(4), pages 615-640, May.
    3. Adriani, Fabrizio & Deidda, Luca G., 2009. "Price signaling and the strategic benefits of price rigidities," Games and Economic Behavior, Elsevier, vol. 67(2), pages 335-350, November.
    4. Bester, Helmut & Ritzberger, Klaus, 2001. "Strategic pricing, signalling, and costly information acquisition," International Journal of Industrial Organization, Elsevier, vol. 19(9), pages 1347-1361, November.
    5. Baojun Jiang & Bicheng Yang, 2019. "Quality and Pricing Decisions in a Market with Consumer Information Sharing," Management Science, INFORMS, vol. 65(1), pages 272-285, January.
    6. Takaoka, Sumiko, 2005. "The effects of product liability costs on R&D with asymmetric information," Japan and the World Economy, Elsevier, vol. 17(1), pages 59-81, January.
    7. F. Adriani & LG Deidda, 2006. "The Monopolist's Blues," Working Paper CRENoS 200611, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    8. Salvatore Piccolo & Piero Tedeschi & Giovanni Ursino, 2018. "Deceptive Advertising with Rational Buyers," Management Science, INFORMS, vol. 64(3), pages 1291-1310, March.
    9. Raff, Horst & Kim, Young-Han, 1999. "Optimal export policy in the presence of informational barriers to entry and imperfect competition," Journal of International Economics, Elsevier, vol. 49(1), pages 99-123, October.
    10. J.-C. Bureau & E. Gozlan & S. Marette, 1999. "Quality signaling and international trade in food products," THEMA Working Papers 99-13, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    11. Marette, S. & Crepsi, J.M., 1999. "Cartel Stability and Quality Signaling," Papers 99-29, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
    12. Ki, Hyoshin & Kim, Jeong-Yoo, 2022. "Sell green and buy green: A signaling theory of green products," Resource and Energy Economics, Elsevier, vol. 67(C).
    13. MAHENC Philippe, 2006. "Lemons are Green: The Informative Role of a Pigovian Tax," LERNA Working Papers 06.05.198, LERNA, University of Toulouse.
    14. Tahir Andrabi & Jishnu Das & Asim Ijaz Khwaja, 2017. "Report Cards: The Impact of Providing School and Child Test Scores on Educational Markets," American Economic Review, American Economic Association, vol. 107(6), pages 1535-1563, June.
    15. Ajay Kalra & Surendra Rajiv & Kannan Srinivasan, 1998. "Response to Competitive Entry: A Rationale for Delayed Defensive Reaction," Marketing Science, INFORMS, vol. 17(4), pages 380-405.
    16. Daley, Brendan & Green, Brett, 2014. "Market signaling with grades," Journal of Economic Theory, Elsevier, vol. 151(C), pages 114-145.
    17. Bagwell, Kyle & Riordan, Michael H, 1991. "High and Declining Prices Signal Product Quality," American Economic Review, American Economic Association, vol. 81(1), pages 224-239, March.
    18. Jianyu Yu & Zohra Bouamra-Mechemache & Angelo Zago, 2018. "What is in a Name? Information, Heterogeneity, and Quality in a Theory of Nested Names," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(1), pages 286-310.
    19. Luca Macedoni, 2022. "Asymmetric information, quality, and regulations," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 1180-1198, September.
    20. Bagwell, Kyle, 1991. "Optimal Export Policy for a New-Product Monopoly," American Economic Review, American Economic Association, vol. 81(5), pages 1156-1169, December.

    More about this item

    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:eee:indorg:v:16:y:1997:i:1:p:43-61. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/inca/505551 .

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505551 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.