학술저널
Cheap-Talk Disclosure of Negative Information and Risk-Averse Buyers
- 서울대학교 경제연구소
- Seoul Journal of Economics
- Seoul Journal of Economics Volume 34 No.3
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2021.08365 - 392 (28 pages)
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DOI : 10.22904/sje.2021.34.3.002
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In this paper, we study the incentives of low-quality sellers to separate them from high-quality sellers. We consider a framework with asymmetric quality information where the only way to communicate quality is via cheap-talk messages. In this framework, any separating strategy pursued by high-quality sellers can be imitated costlessly by low-quality sellers. We show that in the duopoly setting with risk-averse buyers, equilibria exist, where lowquality sellers voluntarily disclose negative information about their products. If the seller is a monopolist or buyers are risk-neutral, such equilibria do not exist.
I. Introduction
II. Literature Review
III. Model
IV. Equilibria with Negative Information
V. Conclusion
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