Sep 21, 2017

Articles in journals

Garcia, F., Cosandier, C., Knauff, M.

forthcoming

21

We investigate the e§ects of increased market transparency on prices in the Bertrand duopoly model for both the cases of strategic complementarities and strategic substitutes. For the former class of games, conventional wisdom concerning prices is conÖrmed, since they decrease. Consumer welfare always increases with higher transparency but changes in Örmsí proÖts are ambiguous. For the latter class of games, an increase in market transparency may lead to an increase in one of the prices, which implies ambiguous e§ects on both consumer welfare and ÖrmsíproÖts. The results of the paper shed light on the mixed evidence con- cerning the e§ects of the Internet on retail markets and may illuminate some of the ongoing related public policy debates.

Bertrand duopoly,market transparency,consumers awareness,supermodular games,strategic complements/substitutes. ,