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Transparency, Prices and Welfare with Imperfect Substitutes

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  • Boone, J.

    (Tilburg University, School of Economics and Management)

  • Potters, J.J.M.

    (Tilburg University, School of Economics and Management)

Abstract

Markets that are not completely transparent feature complex comparative statics with respect to the effect of number of firms, elasticity of substitution between goods and degree of transparency on equilibrium prices. The main result is that the following 'common wisdom' is incorrect: more transparent markets always feature lower prices, higher consumer welfare and lower price dispersion.
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Suggested Citation

  • Boone, J. & Potters, J.J.M., 2002. "Transparency, Prices and Welfare with Imperfect Substitutes," Other publications TiSEM 0fdba50d-e004-40e1-9c01-e, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:0fdba50d-e004-40e1-9c01-e82d8a3da01e
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    References listed on IDEAS

    as
    1. Karen Clay & Ramayya Krishnan & Eric Wolff, 2001. "Prices and Price Dispersion on the Web: Evidence from the Online Book Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 49(4), pages 521-539, December.
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    7. Johan Stennek, 1997. "Coordination in Oligopoly," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(4), pages 541-554, December.
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    Cited by:

    1. Schultz, Christian, 2004. "Market transparency and product differentiation," Economics Letters, Elsevier, vol. 83(2), pages 173-178, May.
    2. KNAUFF, Malgorzata, 2006. "Market transparency and Bertrand competition," LIDAM Discussion Papers CORE 2006037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Elisa Baraibar‐Diez & María D. Odriozola & José Luis Fernández Sánchez, 2017. "A Survey of Transparency: An Intrinsic Aspect of Business Strategy," Business Strategy and the Environment, Wiley Blackwell, vol. 26(4), pages 480-489, May.

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    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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