This paper investigates the impact of asymmetric information on the set of equilibria of a two-period duopoly game with price competition. It turns out that all admissible sequential equilibria of this game share a "collusive" character, i.e., ex ante expected profits for a firm of any type are...

The paper studies the pricing and advertising policies of a monopolist in a situation where consumers discover prices by costly search. The monopolist is shown to choose between no advertising and large scale advertising. This is shown to be optimal behavior even with decreasing returns to scale...