@techreport{Orosel2004Vertical,
abstract = {We analyze vertical product differentiation in a model where a good?s quality is unobservable
to buyers before purchase, a continuum of quality levels is technologically feasible, and
minimum quality is supplied under competitive conditions. After purchase the true quality of
the good is revealed with positive probability. To provide firms with incentives to actually
deliver promised quality, prices must exceed marginal cost. We derive sufficient conditions
for these incentive constraints to determine equilibrium prices, and show that under certain
conditions only one or both of the extreme levels of quality, minimum and maximum quality,
are available in the market.},
author = {Gerhard O. Orosel and Klaus G. Zauner},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {L15; L11; D82; 330; experience goods; product differentiation; product quality; asymmetric information; Produktdifferenzierung; Produktqualit\"{a}t; Gleichgewicht; Asymmetrische Information; \"{O}konomischer Anreiz; Informationsverhalten; Produktinformation; Theorie; Erfahrungsg\"{u}ter},
language = {eng},
number = {1271},
title = {Vertical product differentiation when quality is unobservable to buyers},
type = {CESifo working papers},
url = {http://hdl.handle.net/10419/18909},
year = {2004}
}
