Price Disclosure Rules and Consumer Price Comparison

Stühmeier Torben ()
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Stühmeier Torben: Center of Applied Economic Research Münster (CAWM), Universität Münster, Am Stadtgraben 9, 48143 Münster, Germany
Authors registered in the RePEc Author Service: Torben Stuehmeier

The B.E. Journal of Economic Analysis & Policy, 2015, vol. 15, issue 2, 815-835

Abstract: Search frictions are regarded as a major impediment to active competition in many markets. In some markets, such as financial and retail gasoline, governments and consumer protection agencies call for compulsory price reporting. Consumers could then more easily compare the firms’ offers. We show that for a given level of price comparison, mandatory price reporting indeed generally benefits consumers. Such regulation, however, feeds back into firms’ strategies, resulting in lower levels of price comparison in equilibrium. This effect may dominate so that the regulation leads to higher expected market prices.

Keywords: mixed strategies; price comparison; regulation (search for similar items in EconPapers)
JEL-codes: D83 L13 L51 (search for similar items in EconPapers)
Date: 2015
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Working Paper: Price disclosure rules and consumer price comparison (2014)
Working Paper: Price disclosure rules and consumer price comparison (2014)
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DOI: 10.1515/bejeap-2014-0053

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