Konferenzbeitrag

The Inefficiency of Market Transparency - A Model with Endogenous Entry

Including the entry decision in a Bertrand model with imperfectly informed consumers, we introduce a trade-off at the level of social welfare. On the one hand, market transparency is beneficial when the number of firms is exogenously given. On the other, a higher degree of market transparency implies lower profits and hence makes it less attractive to enter the market in the first place. It turns out that the second effect dominates: too much market transparency has a detrimental effect on consumer surplus and on social welfare.

Language
Englisch

Bibliographic citation
Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Oligopolistic Competition and Network Formation ; No. F9-V2

Classification
Wirtschaft
Oligopoly and Other Imperfect Markets
Information and Product Quality; Standardization and Compatibility
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Subject
Market transparency
Endogenous entry
Homogenous products

Event
Geistige Schöpfung
(who)
Gu, Yiquan
Hehenkamp, Burkhard
Event
Veröffentlichung
(who)
Verein für Socialpolitik
(where)
Frankfurt a. M.
(when)
2010

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Konferenzbeitrag

Associated

  • Gu, Yiquan
  • Hehenkamp, Burkhard
  • Verein für Socialpolitik

Time of origin

  • 2010

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