Controlling Sellers Who Provide Advice: Regulation and Competition*
Résumé
A monopoly seller advising buyers about which of two goods fits their needs may be tempted to recommend the higher margin good. For the seller to collect information about a buyer’s needs and provide truthful advice, the profits from selling both goods must be similar enough, i.e., within an implementability cone. The optimal regulation controls pricing distortions and information‐collection incentives separately via price regulation and fixed rewards respectively. This no longer holds when the seller has private information about costs as both problems interact. We study whether competition and the threat by buyers to switch sellers can substitute for regulation.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Controlling Sellers Who Provide Advice: Regulation and Competition*
|
Résumé |
en
A monopoly seller advising buyers about which of two goods fits their needs may be tempted to recommend the higher margin good. For the seller to collect information about a buyer’s needs and provide truthful advice, the profits from selling both goods must be similar enough, i.e., within an implementability cone. The optimal regulation controls pricing distortions and information‐collection incentives separately via price regulation and fixed rewards respectively. This no longer holds when the seller has private information about costs as both problems interact. We study whether competition and the threat by buyers to switch sellers can substitute for regulation.
|
Auteur(s) |
David Bardey
1
, Denis Gromb
2
, David Martimort
3, 4
, Jérôme Pouyet
5, 6
1
University of Los Andes
( 531338 )
- Venezuela
2
HEC Paris -
Ecole des Hautes Etudes Commerciales
( 105633 )
- 1, rue de la Libération - 78351 Jouy en Josas cedex
- France
3
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
4
PJSE -
Paris Jourdan Sciences Economiques
( 578027 )
- 48 boulevard Jourdan 75014 Paris
- France
5
THEMA -
Théorie économique, modélisation et applications
( 1003463 )
- 33, boulevard du Port 95011 Cergy-Pontoise Cedex
- France
6
ESSEC Business School
( 301020 )
- 1, avenue Bernard Hirsch
CS 50105 Cergy
95021 Cergy Pontoise Cedex
France
Tél : +33 (0)1 34 43 30 00
Fax : +33 (0)1 34 43 30 01
- France
|
Date de publication |
2020-09
|
Volume |
68
|
Numéro |
3
|
Page/Identifiant |
409-444
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Internationale
|
Public visé |
Scientifique
|
Domaine(s) |
|
Projet(s) ANR |
|
DOI | 10.1111/joie.12228 |
UT key WOS | 000566538000001 |
Loading...