All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC

Xiaopeng Xu
''Quality over-provision of information goods''
( 2002, Vol. 12 No.5 )
This paper studies a producer's quality choice of an information good. The marginal cost of quality provision for the good is decreasing. The buyer does not observe the actual quality but can learn a signal which is the sum of quality and a noise. It shows that the producer has an incentive to over-supply quality. Moreover, and interestly, all types of producer may over-supply quality.
Keywords: Information goods
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
D8 - Information, Knowledge, and Uncertainty: General
Manuscript Received : Mar 07 2002 Manuscript Accepted : Mar 08 2002

  This abstract has been downloaded 2149 times                The Full PDF of this paper has been downloaded 151993 times