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Title:The inefficiency of market transparency: a model with endogenous entry PDF Logo
Authors:Gu, Yiquan
Hehenkamp, Burkhard
Issue Date:2010
Series/Report no.:Ruhr economic papers 219
Abstract:Including the entry decision in a Bertrand model with imperfectly informed consumers, we introduce a trade-off at the level of social welfare. On the one hand, market transparency is benefi cial when the number of firms is exogenously given. On the other, a higher degree of market transparency implies lower profits and hence makes it less attractive to enter the market in the first place. It turns out that the second effect dominates: too much market transparency has a detrimental effect on consumer surplus and on social welfare.
Subjects:market transparency
endogenous entry
homogenous products
JEL:D43
L13
L15
ISBN:978-3-86788-251-4
Document Type:Working Paper
Appears in Collections:Ruhr Economic Papers, RWI
Publikationen von Forscherinnen und Forschern des RWI

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