Drugs, Showrooms and Financial Products: Competition and Regulation when Sellers Provide Expert Advice

David Bardey, Denis Gromb, David Martimort and Jerome Pouyet

Working Papers from HAL

Abstract: We consider a market in which sellers can exert an information-gathering effort to advise buyers about which of two goods best fits their needs. Sellers may steer buyers towards the higher margin good. We show that for sellers to collect and reveal information, profits on both goods must be sufficiently close to each other, i.e., lie within an implementability cone, which competition or regulation may ensure. Instruments to do so vary with the context. Controlling market power while improving the quality of advice is more difficult when sellers have private information on the profitability of the goods.

Keywords: Mis-Selling; Expertise; Retailing; Competition; Regulation; Asymmetric Information Keywords Mis-Selling; Asym- metric Information (search for similar items in EconPapers)
Date: 2016-11
New Economics Papers: this item is included in nep-com, nep-mic and nep-reg
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01400841
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Drugs, Showrooms and Financial Products: Competition and Regulation When Sellers Provide Expert Advice (2017)
Working Paper: Drugs, Showrooms and Financial Products: Competition and Regulation when Sellers Provide Expert Advice (2016)
Working Paper: Drugs, Showrooms and Financial Products: Competition and Regulation when Sellers Provide Expert Advice (2016)
Working Paper: Drugs, Showrooms and Financial Products: Competition and Regulation when Sellers Provide Expert Advice (2016)
Working Paper: Drugs, Showrooms and Financial Products: Competition and Regulation When Sellers Provide Expert Advice (2016)
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