Partial shrouding in asymmetric markets

Tobias Wenzel

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

This paper studies shrouding of add-on information in a market where firms differ in add-on production costs. We show that partial shrouding equilibria, characterised by a selection result, exist: Firms with high (low) add-on costs shroud (unshroud). Unshrouding firms charge lower base-good prices than shrouding firms.
Original languageEnglish
Pages (from-to)223-226
JournalEconomics Letters
Volume136
DOIs
Publication statusPublished - 1 Nov 2015

Keywords

  • Add-on pricing
  • Shrouding
  • bounded rationality

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