Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279810 
Authors: 
Year of Publication: 
2023
Series/Report no.: 
ZEW Discussion Papers No. 23-043
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
In markets where sellers' marginal costs of production have a common component, they have informational advantage over buyers regarding those costs. This information asymmetry between sellers and buyers is especially relevant in markets where buyers have to uncover prices through costly search. We propose a theoretical model of simultaneous search that accounts for such information asymmetry. Our main finding is that informing buyers about marginal costs may harm them by deterring search and, hence, softening competition. This result has important implications on policy regulations and voluntary information sharing.
Subjects: 
Information Asymmetry
Consumer Search
Price Competition
JEL: 
D43
D83
L13
Document Type: 
Working Paper

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