Signalling Reversal under Price Competition
| Autor: | Yao-Hui Chiu, 邱耀輝 |
|---|---|
| Rok vydání: | 2009 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 97 In the traditional literature, under incomplete information, the high quality firm can signal its product quality by a high price or advertising. In signaling situation, the distortion of the price will reduce the profit and therefore the profit of the monopolist firm, under incomplete information, will be lower than that in complete information. In this research, we consider a duopoly market in which a new entrant firm engages in price competition with an established firm. Both firms know the product quality of each other perfectly, while consumers are not informed about the product quality of the entrant firm. We first characterize the necessary conditions of the separating equilibria. Then, we discuss the parameter conditions that ensure the existence of the most sensible equilibrium. We find that, under certain conditions, signaling reversal may occur, i.e., the profit of the duopoly firms may be higher than that in complete information. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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