Details

Autor(en) / Beteiligte

• Au, Pak Hung
• Whitmeyer, Mark

Titel

Attraction versus Persuasion: Information Provision in Search Markets

Ist Teil von

• The Journal of political economy, 2023-01, Vol.131 (1), p.202-245

Ort / Verlag

The University of Chicago Press

Erscheinungsjahr

2023

Link zum Volltext

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• We consider a model of oligopolistic competition in a market with search frictions, in which competing firms with products of unknown quality advertise how much information a consumer’s visit will glean. In the unique symmetric equilibrium of this game, the countervailing incentives of attraction and persuasion yield a payoff function for each firm that is linear in the firm’s realized effective value. If the expected quality of the products is sufficiently high (or competition is sufficiently fierce), this corresponds to full information: firms provide the first-best level of information. If not, this corresponds to information dispersion: firms randomize over signals.