Vertically differentiated duopoly with unaware consumers

Sanxi Li, Martin Peitz, Xiaojian Zhao

Research output: Contribution to journalArticleResearchpeer-review

6 Citations (Scopus)

Abstract

We study information disclosure in a vertically differentiatedduopoly with unaware consumers. Sellers have private information about the adverse effect of their products, while consumers are unaware of existence of such adverse effect unless they are informed by the sellers. We show that information remains hidden only if information disclosure reduces the size of the market. In such a case, whether information is disclosed depends on the intensity of competition, the difference of the adverse effect between the two sellers, and the timing at which pricing and information disclosure decisions are made.

Original languageEnglish
Pages (from-to)59-67
Number of pages9
JournalMathematical Social Sciences
Volume70
DOIs
Publication statusPublished - Jul 2014
Externally publishedYes

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