Price competition for an informed buyer

• 成果类型: Article
• 署名作者: Moscarini, G; Ottaviani, M
• 署名单位: Yale University; University of London; University College London; University of London; University College London
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1006/jeth.2000.2779
• 发表日期: 2001
• 页码: 457-493
• 关键词: Price competition; private information; relative quality

摘要

This paper investigates price competition with private information on the demand side. Two sellers each offer a different variety of a good to a buyer endowed with a private binary signal on their relative quality. The model provides an informational foundation to differentiation in Hotelling's price competition game. Equilibrium comparative statics is performed with respect to the prior belief and the precision of the private information. Competition is fierce when the prior strongly favors one seller and private signals are relatively uninformative, Sellers' equilibrium profits may fall with the revelation of public information and are nonmonotonic in the prior belief. (C) 2001 Academic Press.