Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86746
Authors: 
Dubovik, Andrei
Janssen, Maarten C.W.
Year of Publication: 
2008
Series/Report no.: 
Tinbergen Institute Discussion Paper 08-068/1
Abstract: 
We consider an oligopolistic market where firms compete in price and quality and where consumers are heterogeneous in knowledge: some consumers know both the prices and quality of the products offered, some know only the prices and some know neither. We show that two types of signalling equilibria are possible. Both are characterised by dispersion and Pareto-inefficiency of the price/quality offers. But, better price/quality combinations are signalled with lower prices in one type and with higher prices in the other type.
Subjects: 
oligopoly
competition
price
quality
imperfect information
signalling
JEL: 
D43
D83
L13
L15
Document Type: 
Working Paper

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