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Consumer myopia, competition and the incentives to unshroud add-on information
OAI: oai:purehost.bath.ac.uk:openaire_cris_publications/7c62cd31-3b5f-41cd-9acf-a36a50e17880 • DOI: https://doi.org/10.1016/j.jebo.2013.12.002
Abstract
This paper studies unshrouding decisions in a framework similar to Gabaix and Laibson (2006), but considers an alternative unshrouding mechanism where the impact of advertising add-on information depends on the number of unshrouding firms. We show that shrouding becomes less prevalent as the number of competing firms increases. With unshrouding costs a non-monotonic relationship between the number of firms and unshrouding may arise.