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Information Unraveling Revisited: Disclosure of Horizontal Attributes

Celik, L. ORCID: 0000-0002-7668-6358 (2014). Information Unraveling Revisited: Disclosure of Horizontal Attributes. Journal of Industrial Economics, 62(1), pp. 113-136. doi: 10.1111/joie.12043

Abstract

This paper analyzes in a spatial framework how much information a seller discloses about the variety he sells when he faces a buyer with a privately known taste for variety. I identify an equilibrium in which, for each possible variety, the seller's optimal strategy consists of either fully disclosing the variety or disclosing how far it is from the buyer's expected taste. The set of varieties the seller fully discloses monotonically expands as the buyer's taste for variety becomes stronger. I show that this is the unique undefeated equilibrium. From a policy perspective, mandating full disclosure is socially harmful.

Publication Type: Article
Additional Information: This is the peer reviewed version of the following article: Celik, L. (2014). Information Unraveling Revisited: Disclosure of Horizontal Attributes. Journal of Industrial Economics, 62(1), pp. 113-136, which has been published in final form at https://doi.org/10.1111/joie.12043. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce
Departments: School of Arts & Social Sciences > Economics
URI: https://openaccess.city.ac.uk/id/eprint/23494
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