Partial shrouding in asymmetric markets

Tobias Wenzel

doi:10.1016/j.econlet.2015.09.035

Partial shrouding in asymmetric markets

Tobias Wenzel

Department of Economics

Research output: Contribution to journal › Article › peer-review

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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 language	English
Pages (from-to)	223-226
Journal	Economics Letters
Volume	136
DOIs	https://doi.org/10.1016/j.econlet.2015.09.035
Publication status	Published - 1 Nov 2015

Keywords

Add-on pricing
Shrouding
bounded rationality

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10.1016/j.econlet.2015.09.035

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title = "Partial shrouding in asymmetric markets",

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.",

keywords = "Add-on pricing, Shrouding, bounded rationality",

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AB - 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.

KW - Add-on pricing

KW - Shrouding

KW - bounded rationality

UR - http://dx.doi.org/10.1016/j.econlet.2015.09.035

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DO - 10.1016/j.econlet.2015.09.035

M3 - Article

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SP - 223

EP - 226

JO - Economics Letters

JF - Economics Letters

ER -

Partial shrouding in asymmetric markets

Abstract

Keywords

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