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| Author: | Armstrong, M. Zhou, J. Vickers, J. |
| Title: | Consumer protection and the incentive to become informed |
| Journal: | Journal of the European Economic Association
2009 : APR-MAY, VOL. 7:2-3, p. 399-410 |
| Index terms: | consumers incentives information market conditions prices |
| Language: | eng |
| Abstract: | This article examines the impact of protection policies on consumers' incentives to become informed of the best deals available in the market. It is found that imposing a cap on suppliers' prices reduces the incentive to become informed of market conditions in a market with costly information acquisition. The result is that prices paid by both informed and uninformed consumers may rise. It is also revealed that consumers' ability to refuse to receive marketing softens price competition and can make all consumers worse off. |
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