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Opaque selling

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  • Anderson, Simon P.
  • Celik, Levent

Abstract

We study “opaque” selling in multiproduct environments – a marketing practice in which sellers strategically withhold product information by keeping important characteristics of their products hidden until after purchase. We show that a monopolist will always use opaque selling, but it is not first-best optimal to do so. However, opaque selling might be used at the constrained optimum (with the monopolist’s pricing behavior taken as given). For linear disutility costs, it is optimal for a monopolist to offer a single opaque product.

Suggested Citation

  • Anderson, Simon P. & Celik, Levent, 2020. "Opaque selling," Information Economics and Policy, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:iepoli:v:52:y:2020:i:c:s0167624519300988
    DOI: 10.1016/j.infoecopol.2020.100869
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    References listed on IDEAS

    as
    1. Pavlov Gregory, 2011. "Optimal Mechanism for Selling Two Goods," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 11(1), pages 1-35, February.
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    5. Kinshuk Jerath & Serguei Netessine & Senthil K. Veeraraghavan, 2010. "Revenue Management with Strategic Customers: Last-Minute Selling and Opaque Selling," Management Science, INFORMS, vol. 56(3), pages 430-448, March.
    6. Thanassoulis, John, 2004. "Haggling over substitutes," Journal of Economic Theory, Elsevier, vol. 117(2), pages 217-245, August.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Opaque products; Product line design; Product differentiation; Price discrimination;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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