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Putting on a tight leash and levelling playing field: An experiment in strategic obfuscation and consumer protection

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  • Gu, Yiquan
  • Wenzel, Tobias

Abstract

The paper reports the results of an experiment where asymmetric sellers of a product can obfuscate the market. We show that policy measures may have unintended effects of increasing obfuscation incentives. We find that policies that limit the effectiveness of obfuscation and policies that promote parity between firms can lead less prominent firms to increase their obfuscation efforts. Despite this unintended effect, however, the former type of policies is effective in boosting consumer welfare.

Suggested Citation

  • Gu, Yiquan & Wenzel, Tobias, 2015. "Putting on a tight leash and levelling playing field: An experiment in strategic obfuscation and consumer protection," DICE Discussion Papers 192, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  • Handle: RePEc:zbw:dicedp:192
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    References listed on IDEAS

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    Cited by:

    1. Bonnet, Céline & Bouamra-Mechemache, Zohra & Klein, Gordon & Richards, Timothy J., 2016. "Strategic Obfuscation and Retail Pricing," TSE Working Papers 16-733, Toulouse School of Economics (TSE).
    2. repec:bla:scotjp:v:64:y:2017:i:2:p:169-190 is not listed on IDEAS
    3. Bonnet, Céline & Schain, Jan Philip, 2017. "An empirical analysis of mergers: Efficiency gains and impact on consumer prices," DICE Discussion Papers 244, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

    More about this item

    Keywords

    Experiment; Obfuscation; Consumer Protection; Behavioural Industrial Organisation;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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