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The Effect Of Group Size And Asymmetries On The Incentive To Reveal Group‐Specific Information

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  • DAVID REIFFEN

Abstract

In this paper, I examine how firms' incentives to differentiate their products through the revelation of truthful information about product attributes varies with the distribution of consumer preferences for those attributes. I show that information will tend to be provided for large groups, even absent scale economies in producing that information. In addition, the relative sizes of the groups whose estimates of product quality change positively vs. negatively (i.e., the degree of asymmetry) by the information is likewise an important determinant of its profitability.

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  • David Reiffen, 2007. "The Effect Of Group Size And Asymmetries On The Incentive To Reveal Group‐Specific Information," Journal of Industrial Economics, Wiley Blackwell, vol. 55(4), pages 739-769, December.
    • Handle: RePEc:bla:jindec:v:55:y:2007:i:4:p:739-769
    DOI: 10.1111/j.1467-6451.2007.00328.x
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    References listed on IDEAS

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    1. Gene M. Grossman & Carl Shapiro, 1984. "Informative Advertising with Differentiated Products," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(1), pages 63-81.
    2. Meurer, Michael & Stahl, Dale II, 1994. "Informative advertising and product match," International Journal of Industrial Organization, Elsevier, vol. 12(1), pages 1-19, March.
    3. Kai A. Konrad, 2004. "Inverse Campaigning," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 347-360, Springer.
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    Cited by:

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    2. Hosken, Daniel & Wendling, Brett, 2013. "Informing the uninformed: How drug advertising affects check-up visits," International Journal of Industrial Organization, Elsevier, vol. 31(2), pages 181-194.

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