Simple market equilibria with rationally inattentive consumers

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F67985998%3A_____%2F12%3A00377204" target="_blank" >RIV/67985998:_____/12:00377204 - isvavai.cz</a>
Result on the web
<a href="http://dx.doi.org/10.1257/aer.102.3.24" target="_blank" >http://dx.doi.org/10.1257/aer.102.3.24</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1257/aer.102.3.24" target="_blank" >10.1257/aer.102.3.24</a>

Result language
angličtina
Original language name
Simple market equilibria with rationally inattentive consumers
Original language description
We study a market with rationally inattentive consumers who are unsure of the terms of the offers made by firms, but can acquire information about the terms at a cost. In a symmetric equilibrium, the price set by firms is continuously increasing in the cost of information for consumers and decreasing in the number of firms operating. In addition, favorable a priori information about a firm leads it to set a higher price, and a new entrant can increase demand for incumbents. When consumers have heterogeneous costs of information, firms selling low-quality products may choose to set the highest prices.
Czech name
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Czech description
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Type
J<sub>x</sub> - Unclassified - Peer-reviewed scientific article (Jimp, Jsc and Jost)
CEP classification
AH - Economics
OECD FORD branch
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Project
<a href="/en/project/GPP402%2F11%2FP236" target="_blank" >GPP402/11/P236: Implications of Rational Inattention</a><br>
Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year
2012
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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