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The Provision of Information on a Market with Vertically Differentiated Goods

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  • SEVY , David

    (Laboratoire d’Econométrie de l’Ecole Polytechnique, 1 rue Descartes, 75005 Paris, France)

Abstract

This note incorporates vertical differentiation into a two-stage model constructed by Ireland(1992), in which duopolistic firms first choose a costless provision of information to provide and then compete in prices. Partial information stilI occurs at equilibrium, to ensure positive expected profits. For quality differential above a threshold value, there remains only one pure strategies Nash equilibrium with the best firm informing the whole market; quality raising harms consumers by depriving them of more surplus.

Suggested Citation

  • SEVY , David, 1993. "The Provision of Information on a Market with Vertically Differentiated Goods," LIDAM Discussion Papers CORE 1993004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1993004
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp1993.html
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