Partial shrouding in asymmetric markets

Tobias Wenzel

Economics Letters, 2015, vol. 136, issue C, 223-226

Abstract: This paper studies shrouding of add-on information in a market where firms differ in add-on production costs. We show that partial shrouding equilibria, characterised by a selection result, exist: Firms with high (low) add-on costs shroud (unshroud). Unshrouding firms charge lower base-good prices than shrouding firms.

Keywords: Add-on pricing; Shrouding; Bounded rationality (search for similar items in EconPapers)
JEL-codes: D40 D80 L10 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:136:y:2015:i:c:p:223-226

DOI: 10.1016/j.econlet.2015.09.035

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