Competition and confidentiality: Signaling quality in a duopoly when there is universal private information
成果类型：
Article
署名作者：
Daughety, Andrew F.; Reinganum, Jennifer F.
署名单位：
Vanderbilt University; Vanderbilt University
刊物名称：
GAMES AND ECONOMIC BEHAVIOR
ISSN/ISSBN：
0899-8256
DOI：
10.1016/j.geb.2006.03.001
发表日期：
2007
页码：
94-120
关键词：
摘要：
We model non-cooperative signaling by two firms that compete over a continuum of consumers, assuming each consumer has private information about the intensity of her preferences for the firms' respective products and each firm has private information about its own product's quality. We characterize a symmetric separating equilibrium in which each firm's price reveals its respective product quality. We show that the equilibrium prices, the difference between those prices, the associated outputs, and profits are all increasing functions of the ex ante probability of high safety. If horizontal product differentiation is sufficiently great then equilibrium prices and profits are higher under incomplete information about quality than if quality were commonly known. Thus, while signaling imposes a distortionary loss on a monopolist using price to signal quality, duopolists may benefit from the distortion as it can reduce competition. Finally, average quality is lower since signaling quality redistributes demand towards low-quality firms. (c) 2006 Elsevier Inc. All rights reserved.
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