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Faculty of Economics

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Rocha, M. and Greve, T.

Contracting in a market with differential information


Abstract: This Consider an oligopolistic industry where two firms have access to the same technology and compete in prices, but one firm has access to better information about the customers in the market. We assume that better information allows the better informed firm to attract specific customers. The better informed firm obtains a first customer contact advantage, whereas the uninformed firm can only offer a menu of prices without being able to pre-identify the types of customers. We show that better information does not lead to higher profit.

JEL Codes: D43 D82 L13

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EPRG Paper Link: 1624

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