The social value of information on product quality

Kenneth Corts

Economics Letters, 2014, vol. 122, issue 2, 140-143

Abstract: In the context of a seller with private information about product quality, I show that revelation of information on product quality is sometimes, but not always, socially valuable. When it is socially valuable, there is generally a tradeoff between the acquisition and revelation of finer, but more costly information and the revelation of coarser, but less costly information. As a result, it can be socially optimal for firms to reveal only coarse private information.

Keywords: Social welfare; Private information; Learning (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:122:y:2014:i:2:p:140-143

DOI: 10.1016/j.econlet.2013.11.003

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