Autore
Schlag, Karl H.

Titolo
The impact of selling information on competition
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 2000 - Fascicolo: 6 - Pagina iniziale: 1 - Pagina finale: 29

We consider a homogenous good oligopoly with indentical consumers who learn about prices either by (sequentially) visiting firms or by consulting a price agency who sells information about which firm charges the lowest price. In the sequential equilibrium with maximal trade and minimal search, prices are dispersed and consumers randomize between consulting a price agency and buying at the first firm encountered. Low competition among price agencies induces maximal price dispersion. High competition among firms leads to offers that are either rip-offs or bargains where most consumers visit a price agency and firm profits are small.




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