Competing Through Information Provision

Jean Guillaume Forand

No 1201, Working Papers from University of Waterloo, Department of Economics

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, yet partial information is provided when sellers are price-setters. 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.

JEL-codes: C72 D43 D44 D82 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2012-04, Revised 2012-04
New Economics Papers: this item is included in nep-com, nep-cta and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Competing through information provision (2013)
Working Paper: Competing Through Information Provision (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:wat:wpaper:1201

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