Snobs and Quality Gaps

Suren Basov

No 944, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: In this paper I revisit the Mussa and Rosen (1978) model. However, unlike Mussa and Rosen, I assume that there is a positive mass of the consumers of the highest possible type. I call them snobs. I prove that snobs consumers are served efficiently and the product line decreases in the mass of the serious consumers. Moreover, if the mass of the serious consumers is more than some critical level then they are the only consumers who are served at equilibrium.

Keywords: screening; product line; efficiency (search for similar items in EconPapers)
JEL-codes: C0 D8 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2005
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Journal Article: Snobs and Quality Gaps (2006)
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