EXCESSIVE COMPETITION ON HEADLINE PRICES
当消费者只关注标价而忽略隐藏费用时，竞争可能加剧产品选择扭曲和社会损害，消费者保护政策需约束隐藏费用以恢复效率。
Abstract In a variety of purchasing situations, consumers may focus primarily on headline prices, disregarding the full costs associated with acquiring and maintaining a product or service contract. Even when this is the case, the literature has delineated various circumstances where intense competition can protect consumers through the so‐called “waterbed effect.” In this article, we however show that when consumers have context‐dependent preferences, competition may rather exacerbate their and society's harm by distorting product choice and provision. Then, consumer protection policy must sufficiently constrain hidden fees so that competition, along with high‐quality firms' incentives to educate consumers, can restore efficiency.