Preferences, Confusion and Competition
研究差异化产品市场中企业混淆消费者的动机与福利影响，发现偏好极化时企业会充分教育消费者，而混淆仅在偏好不明确时出现且福利后果更差。
Abstract Existing literature has argued that firms benefit from confusing consumers of homogeneous goods. This paper shows that this insight generally breaks down with differentiated goods and heterogeneous preferences: with polarised taste distributions, firms fully educate consumers. In cases where firms nevertheless confuse consumers, the welfare consequences are worse than for homogeneous goods, as consumers choose dominated options. Similar insights are also obtained for political contests, in which candidates compete for voters with heterogeneous preferences: parties choose ambiguous platforms only when preferences are ‘indecisive’, featuring a concentration of indifferent voters.