Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86862
Authors: 
Gubins, Sergejs
Verhoef, Erik T.
de Graaff, Thomas
Year of Publication: 
2010
Series/Report no.: 
Tinbergen Institute Discussion Paper 10-091/3
Abstract: 
This paper models strategic interactions between a product supplier, a provider of information about product quality, and end users, in the context of road transportation. Using a game-theoretical analysis of suppliers' pricing strategies, we assess the social welfare effects of traffic information under various road markets with different ownership regimes. The results show that in this context, the distortive welfare effect of monopolistic information pricing appears small to negligible. Collusion of the road operator and information provider yields higher social welfare than independent pricing by two firms. The intuition behind this result resembles that behind the welfare effects of double marginalization, but it is not exactly the same, as traffic information is not strictly complementary to road use.
Subjects: 
willingness to pay for information
private road operator
private information provider
ICT
JEL: 
L11
L15
R41
R48
Document Type: 
Working Paper

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