Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223410
Authors: 
Martin, Simon
Year of Publication: 
2020
Series/Report no.: 
DICE Discussion Paper No. 350
Abstract: 
We study a novel trade-off in market transparency regulation by estimating a structural model of the German retail gasoline market. Transparent environments enable easy price comparisons and match findings. Restricting transparency such that only the cheapest offers are shown induces firms to compete for attention, but matching is inefficient. We find that there is an inverse u-shaped relationship between consumer welfare and market transparency. Consumer welfare is maximal when only the first 20% of prices are shown, which decreases consumer expenditures by 1.2%. Our framework allows estimating games of incomplete information with very lax data requirement.
Subjects: 
market transparency
consumer search
awareness
consideration sets
retail gasoline prices
JEL: 
D22
D43
D83
L13
L50
ISBN: 
978-3-86304-349-0
Document Type: 
Working Paper

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