Consumer always face the problems of not knowing which stores sell a good at the lowest price and how quality varies across brands. They know that price do vary on a same product across brands, but they do know not what that price difference represents, for the better qualities that product possess? But are these better qualites worth paying that extra difference in price? If consumers are provided by perfect information about product prices, attributes …
showed first 75 words of 1812 total

showed last 75 words of 1812 total
…charging high prices but relative low quality cameras may have a very convincing and effective information provision system through experts, standards and certification, e.g., warranties and guarantees. These are socially desirable if the benefits to customers outweigh the costs of collecting and disseminating the information. Bibliography http://www.pricerunner.com Modern Industrial Organization - Dennis Carlton and Jeffrey Perloff, Addison Wesly Longman, Inc. The Economics of Imperfect Information - Louis Phlips, Cambridge University Press