Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/216845 
Erscheinungsjahr: 
2020
Schriftenreihe/Nr.: 
Working Paper No. 344
Verlag: 
University of Zurich, Department of Economics, Zurich
Zusammenfassung: 
Do firms seek to make the market transparent,or do they confuse the consumers in their product perceptions? We show that the answer to this question depends decisively on preference heterogeneity. Contrary to the well-studied case of homogeneous goods, confusion is not necessarily an equilibrium in markets with differentiated goods. In particular, if the taste distribution is polarized, so that indifferent consumers are relatively rare, firms strive to fully educate consumers. By contrast, if the taste distribution features a concentration of indecisive consumers, confusion becomes part of the equilibrium strategies. The adverse welfare consequences of confusion can be more severe than with homogeneous goods, as consumers may not only pay higher prices, but also choose a dominated option, or inefficiently refrain from buying. Qualitatively similar insights obtain for political contests, in which candidates compete for voters with heterogeneous preferences.
Schlagwörter: 
Obfuscation
consumer confusion
differentiated products
price competition
polarized/indecisive preferences
political competition
JEL: 
C93
I21
I24
I26
J24
Persistent Identifier der Erstveröffentlichung: 
Dokumentart: 
Working Paper

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