In this paper we extend the model of vertical product differentiation to also consider information disparities about the extent of quality differences. Equilibrium prices turn out to depend not only on the share of informed consumers but also on uninformed consumers beliefs about quality...

To explain heterogeneous diffusion of generics in OECD countries, we have analyzed genericsdemand as affected by information disparities and quality misperception. A sequential pricecompetition model, with perceived vertical differentiation, allows to re-consider the GenericsCompetition Paradox...

In this paper we extend the model of vertical product differentiation to also consider information disparities about the extent of quality differences. Equilibrium prices turn out to depend not only on the share of informed consumers but also on uninformed consumers beliefs about quality...