Consumer Protection in Markets with Informationally Weak Buyers

Charles Stuart

Bell Journal of Economics, 1981, vol. 12, issue 2, 562-573

Abstract: Resource allocation in a market where product quality is variable and where buyers can purchase partial information on product quality is investigated. It is shown that (1) (inefficient) equilibria with only low quality units can always exist; (2) (efficient) equilibria with only high quality units are possible only under surprisingly strong information conditions; and (3) "mixed" equilibria, in which both high and low quality units are produced and sold and in which buyers obtain partial unit-specific quality information, can also exist. The implications of the results for (potentially) efficiency-increasing regulation are discussed.

Date: 1981
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://links.jstor.org/sici?sici=0361-915X%2819812 ... O%3B2-3&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:bellje:v:12:y:1981:i:autumn:p:562-573

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in Bell Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().