When product quality is unobservable before purchase, the equilibrium price may be inefficiently high in order to signal high quality. The paper builds a reputation model where under reasonable assumptions nonprofit organizations can credibly charge lower prices than for-profit organizations
Uninformed Customers and Nonprofit Organizations: Modelling Contract Failure Theory
CHILLEMI, OTTORINO;GUI, BENEDETTO
2004
Abstract
When product quality is unobservable before purchase, the equilibrium price may be inefficiently high in order to signal high quality. The paper builds a reputation model where under reasonable assumptions nonprofit organizations can credibly charge lower prices than for-profit organizationsFile in questo prodotto:
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