蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Information Acquisition and Product Differentiation Perception
蝌蚪网 Journal: Microeconomics
vol. 17,
no. 3, August 2025
(pp. 1–34)
Abstract
We consider the equilibrium interplay between sellers' price competition and consumers' perception of product differentiation. We analyze a situation where, before trading, consumers acquire information at a cost about their preferences between sellers' differentiated products. The incentive for information acquisition depends on the average value of products, the objective product differentiation, and their beliefs about sellers' prices. The acquired information shapes consumers' perceived product differentiation and sellers' equilibrium prices. We characterize the unique symmetric equilibrium and study comparative statics with respect to consumer information acquisition cost and sensitivity to product differentiation.Citation
Biglaiser, Gary, Jiadong Gu, and Fei Li. 2025. "Information Acquisition and Product Differentiation Perception." 蝌蚪网 Journal: Microeconomics 17 (3): 1–34. DOI: 10.1257/mic.20230104Additional Materials
JEL Classification
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness