Dynamic competition in deceptive markets

• 成果类型: Article
• 署名作者: Johnen, Johannes
• 署名单位: Universite Catholique Louvain
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12318
• 发表日期: 2020
• 页码: 375-401
• 关键词: price-discrimination; adverse selection; BEHAVIOR; INFORMATION; consumers; MODEL; cost

摘要

In many deceptive markets, firms design contracts to exploit mistakes of naive consumers. These contracts also attract less-profitable sophisticated consumers. I study such markets when firms compete repeatedly. By observing their customers' usage patterns, firms acquire private information about their level of naivete. First, I find that private information on naivete mitigates competition and is of great value even with homogeneous products. Second, competition between initially symmetrically informed firms is mitigated when firms can educate naifs about mistakes. In an analogous setting without naifs, the second result does not occur; the first result occurs when firms cannot disclose fees.