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| Martin Sefton and John Morgan |
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| ''Information externalities in a model of sales'' |
| ( 2001, Vol. 4 No.7 ) |
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| We anlayze Varian's (1980) Model of Sales, and show that when the number of uninformed consumers increases, prices become less competitive for all consumers. Thus, the influx of uninformed consumers generates a negative externality increasing the prices paid by informed consumers. |
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| Manuscript Received : Jul 18 2001 | | Manuscript Accepted : Jul 18 2001 |
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