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Price disclosure rules and consumer price comparison

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  • Stühmeier, Torben

Abstract

Search frictions are classified as a main impediment to active competition in many markets. In some markets, such as in financial and retail gasoline markets, governments and consumer protection agencies call for a compulsory price reporting. Consumers should then more easily compare the firms' offers. We show that for a given level of price comparison, a mandatory price reporting indeed widely benefits consumers. The regulation, however, feeds back into firms' strategies, resulting in lower equilibrium levels of price comparison. This effect may dominate and the regulation may lead to higher expected market prices.

Suggested Citation

  • Stühmeier, Torben, 2014. "Price disclosure rules and consumer price comparison," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100482, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc14:100482
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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