# Information revelation in competitive markets

Listed:
• Maxim Ivanov

()

## Abstract

This paper analyzes a market with multiple sellers and horizontally differentiated products. We investigate the sellers’ incentives to reveal product relevant information that affects the buyer’s private valuation. The main finding is that if the number of sellers is sufficiently large, there is a unique symmetric equilibrium with full information disclosure. Thus, unlike the results by Lewis and Sappington (Int Econ Rev 35:309–327, 1994 ) and Johnson and Myatt (Am Econ Rev 93:756–784, 2006 ) for monopoly, which state that the monopolist reveals either full information or no information, intense competition results in a single extreme with respect to information disclosure. We show that the market is always inefficient, but the magnitude of inefficiency converges to zero at a high rate as competition intensifies. Copyright Springer-Verlag 2013

## Suggested Citation

• Maxim Ivanov, 2013. "Information revelation in competitive markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(1), pages 337-365, January.
• Handle: RePEc:spr:joecth:v:52:y:2013:i:1:p:337-365
DOI: 10.1007/s00199-011-0629-3
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File URL: http://hdl.handle.net/10.1007/s00199-011-0629-3

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## References listed on IDEAS

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1. Mark Bagnoli & Ted Bergstrom, 2005. "Log-concave probability and its applications," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(2), pages 445-469, August.
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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.
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Cited by:

1. Cristián Troncoso-Valverde, 2015. "Information Release in Second–Price Auctions," Serie Working Papers 15, Universidad del Desarrollo, School of Business and Economics.
2. Christian Ewerhart, 2013. "Regular type distributions in mechanism design and $$\rho$$ -concavity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(3), pages 591-603, August.
3. Salvatore Piccolo & Aldo Pignataro, 2016. "Consumer Loss Aversion, Product Experimentation and Implicit Collusion," CSEF Working Papers 457, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
4. Forand, Jean Guillaume, 2013. "Competing through information provision," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 438-451.
5. Wang, Chengsi, 2011. "Informative Advertising, Consumer Search and Transparency Policy," MPRA Paper 34977, University Library of Munich, Germany.
6. repec:pit:wpaper:381 is not listed on IDEAS
7. repec:eee:indorg:v:56:y:2018:i:c:p:49-77 is not listed on IDEAS
8. Maxim Ivanov, 2016. "Dynamic learning and strategic communication," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(3), pages 627-653, August.
9. Peter Postl, 2013. "Efficiency versus optimality in procurement," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(2), pages 425-472, June.
10. Drugov, Mikhail & Troya Martinez, Marta, 2012. "Vague Lies: How to Advise Consumers When They Complain," CEPR Discussion Papers 9201, C.E.P.R. Discussion Papers.

### Keywords

Information revelation; Competition; Market; Differentiated products; C72; D43; D82; D83;

### JEL classification:

• C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
• D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
• D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
• D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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