Strategic pricing with rational inattention to quality

被引:33
作者
Martin, Daniel [1 ]
机构
[1] Northwestern Univ, Kellogg Sch Management, 2001 Sheridan Rd, Evanston, IL 60208 USA
关键词
Rational inattention; Limited attention; Strategic naivete; Price signaling; EQUILIBRIUM; PERSUASION; MODELS;
D O I
10.1016/j.geb.2017.03.007
中图分类号
F [经济];
学科分类号
02 ;
摘要
Using a standard strategic pricing game, I determine how sellers set prices when facing buyers who are "rationally inattentive" to information about product quality. Two cases are studied: strategically sophisticated buyers who are rationally inattentive to exogenous information about quality and strategically naive buyers who are rationally inattentive to strategic information about quality. In both cases, there exists an equilibrium where high quality sellers price high and low quality sellers mimic them by pricing high with a positive probability. This mimicking rate is uniquely identified and determines the informativeness of prices. In general, a drop in the marginal cost of attention results in more informative prices, but I identify conditions for which a drop in the marginal cost of attention can result in less informative prices. (C) 2017 Elsevier Inc. All rights reserved.
引用
收藏
页码:131 / 145
页数:15
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