Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

Consumer Information, Equilibrium Industry Price, and the Number of Sellers

Mark A. Satterthwaite
The Bell Journal of Economics
Vol. 10, No. 2 (Autumn, 1979), pp. 483-502
Published by: RAND Corporation
DOI: 10.2307/3003348
Stable URL: http://www.jstor.org/stable/3003348
Page Count: 20
  • Read Online (Free)
  • Download ($24.00)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Consumer Information, Equilibrium Industry Price, and the Number of Sellers
Preview not available

Abstract

Define a reputation good to be any product or service for which sellers' products are differentiated and consumers' search among sellers consists of a series of inquiries to relatives, friends, and associates for recommendations. Examples of reputation goods are personal legal services and primary medical care. The paper shows that if a monopolistically competitive industry sells a reputation good, then an increased number of sellers may perversely cause the industry's equilibrium price to rise. This result is based on maximizing behavior on both sides of the market: consumers are assumed to search rationally and sellers are assumed to profit maximize.

Page Thumbnails

  • Thumbnail: Page 
483
    483
  • Thumbnail: Page 
484
    484
  • Thumbnail: Page 
485
    485
  • Thumbnail: Page 
486
    486
  • Thumbnail: Page 
487
    487
  • Thumbnail: Page 
488
    488
  • Thumbnail: Page 
489
    489
  • Thumbnail: Page 
490
    490
  • Thumbnail: Page 
491
    491
  • Thumbnail: Page 
492
    492
  • Thumbnail: Page 
493
    493
  • Thumbnail: Page 
494
    494
  • Thumbnail: Page 
495
    495
  • Thumbnail: Page 
496
    496
  • Thumbnail: Page 
497
    497
  • Thumbnail: Page 
498
    498
  • Thumbnail: Page 
499
    499
  • Thumbnail: Page 
500
    500
  • Thumbnail: Page 
501
    501
  • Thumbnail: Page 
502
    502