Increase the visibility of your scientific production by authorizing the export of your publications to HAL!

Competitive Screening under Heterogeneous Information

Garrett, Daniel F., Gomes, Renato and Maestri, Lucas (2019) Competitive Screening under Heterogeneous Information. Review of Economic Studies, 86. pp. 1590-1630.

This is the latest version of this item.

Download (1MB) | Preview
Official URL :
Identification Number : 10.1093/restud/rdy072


We study the interplay between informational frictions and second-degree price discrimination. Our theory recognizes that consumers differ in their tastes for quality as well as in the information they possess about available offers, which leads to dispersion over price-quality menus in equilibrium. While firms are ex-ante identical, we show that their menus are ordered so that more generous menus leave more surplus to consumers of all valuations. We explore the cross-section of equilibrium menus and variations in market conditions to generate empirical predictions on prices, qualities and markups across firms, and within a firm’s product line. For instance, more competition may raise prices for low-quality goods; yet, consumers are better off, as the qualities they receive also increase. The predictions of our model illuminate empirical findings in many markets, such as those for cell phone plans, yellow-pages advertising, cable TV and air travel.

Item Type: Article
Language: English
Date: 2019
Refereed: Yes
Uncontrolled Keywords: competition, screening, heterogeneous information, price discrimination, adverse selection
JEL Classification: D82 - Asymmetric and Private Information
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 26 Nov 2018 11:57
Last Modified: 13 Mar 2021 12:28
OAI Identifier:

Available Versions of this Item

Actions (login required)

View Item View Item


Downloads per month over past year