Competing through information provision

Jean Guillaume Forand

International Journal of Industrial Organization, 2013, vol. 31, issue 5, 438-451

Abstract: This paper studies the symmetric equilibria of a two-buyer, two-seller model of directed search in which sellers commit to information provision. More informed buyers have better differentiated private valuations and extract higher rents from trade. When sellers cannot commit to sale mechanisms, information provision is higher under competition than under monopoly. In contrast, when sellers commit to both information provision and sale mechanisms, I identify simple conditions under which sellers post auctions and provide full information in every equilibrium, ensuring that all equilibrium outcomes are constrained efficient. Sellers capture the efficiency gains from increased information and compete only over non-distortionary rents offered to buyers.

Keywords: Information structures; Directed search; Competing mechanism designers (search for similar items in EconPapers)
JEL-codes: C72 D43 D44 D82 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Competing Through Information Provision (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:31:y:2013:i:5:p:438-451

DOI: 10.1016/j.ijindorg.2013.07.009

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