Imperfect competition and quality signalling
研究企业在价格竞争中通过价格传递质量信号时，不完全信息如何缓和价格竞争，并分析低质量企业和高质量企业在不同市场条件下的偏好，以及消费者损失增加对低质量企业的反常影响。
We examine the interplay of imperfect competition and incomplete information in the context of price competition among firms producing horizontally and vertically differentiated substitute products. Incomplete information about vertical quality (consumer satisfaction) signalled via price softens price competition. Low‐quality firms always prefer the incomplete information game to the full‐information analog. Moreover, for “high‐value” markets with a sufficiently high proportion of high‐quality firms, these firms also prefer incomplete information to full information. We find that an increase in the loss to consumers associated with the low‐quality product may perversely benefit low‐quality firms; we consider applications to tort reform and professional licensing.