Quality choice, signalling, and moral hazard

Hannu Salonen

Finnish Economic Papers, 1990, vol. 3, issue 2, 166-171

Abstract: In this paper it is argued that prices should not reveal the quality of the good to the consumers, when there is asymmetric information about quality between the firm and the consumers, and the firm can affect the quality of its product. Instead, prices should be completely uninformative, so that firms are able to make larger investments to improve the quality, and increase the expected utility of the consumers.

Date: 1990
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://taloustieteellinenyhdistys.fi/images/stories/fep/f1990_2h.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fep:journl:v:3:y:1990:i:2:p:166-171

Access Statistics for this article

More articles in Finnish Economic Papers from Finnish Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Editorial Secretary ( this e-mail address is bad, please contact ).