The Inefficiency of Market Transparency - A Model with Endogenous Entry

Konferenzbeitrag

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.

Object Details

• Language: Englisch

References and Relationships

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

Classification and Topics

• 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

Contributors, Places and Time

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

Further information

• Handle: http://hdl.handle.net/10419/37416
• Last update: 10.03.2025, 11:43 AM CET