The Simple Analytics of Price Signaling Quality

We present a diagrammatic and step-by-step analysis of price signaling quality. Because quality is a continuum on the real positive line, out-of-equilibrium beliefs need not be specified, i.e., every positive price is a positive outcome in equilibrium. We first study the behavior of the monopoly when price conveys information about quality. We then show the effect of information flows on welfare, i.e., profit and consumer surplus

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Year of publication:	2012
Authors:	Mirman, Leonard J.
Other Persons:	Santugini, Marc (contributor)
Publisher:	[2012]: [S.l.] : SSRN
Subject:	Theorie \| Theory \| Produktqualität \| Product quality \| Preis \| Price \| Signalling \| Preismanagement \| Pricing strategy

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