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When does a firm disclose product information?

2012; Wiley; Volume: 43; Issue: 4 Linguagem: Inglês

10.1111/1756-2171.12002

1756-2171

Frédéric Koessler, Régis Renault,

Merger and Competition Analysis

A firm chooses a price and the product information it discloses to a consumer whose tastes are privately known. We provide a necessary and sufficient condition on the match function for full disclosure to be the unique equilibrium outcome whatever the costs and prior beliefs about product and consumer types. It allows for products with different qualities as well as some horizontal match heterogeneity. With independently distributed product and consumer types, full disclosure is always an equilibrium and a necessary and sufficient equilibrium condition is that all firm types earn at least the full‐disclosure profit.