Firm-specific information, product differentiation, and industry equilibrium

Jeffrey Perloff and Steven Salop

No 47003, CUDARE Working Papers from University of California, Berkeley, Department of Agricultural and Resource Economics

Abstract: Where consumers have imperfect information about specific firms’ prices and lack information about the market, firms have informational market power. In general, improving the consumer’s information about each firm’s price will not necessarily lower average market price. We show, however, that certain types of improvements will lower price. Moreover, a reduction in barriers to entry (e.g., capital costs) will lower price-holding information constant. Where a significant number (but not all) consumers have perfect information, single-price equilibria are impossible.

Keywords: Consumer/Household Economics; Demand and Price Analysis (search for similar items in EconPapers)
Pages: 37
Date: 1985-03
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Firm-Specific Information, Product Differentiation, and Industry Equilibrium (1986)
Working Paper: Firm-specific information, product differentiation, and industry equilibrium (1985)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucbecw:47003

DOI: 10.22004/ag.econ.47003

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