Inferior Products and Profitable Deception
研究竞争零售市场中企业通过隐藏附加价格欺骗消费者的条件，发现劣质产品比优质产品更易实现盈利性欺骗，并应用于共同基金和信用卡市场。
We analyse conditions facilitating profitable deception in a simple model of a competitive retail market. Firms selling homogenous products set anticipated prices that consumers understand and additional prices that naive consumers ignore unless revealed to them by a firm, where we assume that there is a binding floor on the anticipated prices. Our main results establish that “bad” products (those with lower social surplus than an alternative) tend to be more reliably profitable than “good” products. Specifically, (<cross-ref type="fd" refid="rdw037M-1">1</cross-ref>) in a market with a single socially valuable product and sufficiently many firms, a deceptive equilibrium—in which firms hide additional prices—does not exist and firms make zero profits. But perversely, (<cross-ref type="fd" refid="rdw037M-2">2</cross-ref>) if the product is socially wasteful, then a profitable deceptive equilibrium always exists. Furthermore, (<cross-ref type="fd" refid="rdw037M-3">3</cross-ref>) in a market with multiple products, since a superior product both diverts sophisticated consumers and renders an inferior product socially wasteful in comparison, it guarantees that firms can profitably sell the <it>inferior</it> product by deceiving consumers. We apply our framework to the mutual fund and credit card markets, arguing that it explains a number of empirical findings regarding these industries.