search query: @author Faulhaber, G. R. / total: 6
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| Author: | Allen, F. Faulhaber, G. R. |
| Title: | Rational rationing |
| Journal: | Economica
1991 : MAY, VOL. 58:230, p. 189-98 |
| Index terms: | RATIONING QUALITY MARKETS CONSUMERS LEARNING MARKETING THEORY |
| Language: | eng |
| Abstract: | In many actual markets (luxury cars, fine restaurants, labour service of young professionals) price can be below the market-clearing level, and excess demand is queued or denied. The persistence of such markets is difficult to reconcile with standard theory, since the seller's profits could apparently be improved by raising price to restrict demand. A model is developed in which consumers learn about firm quality from noisy observations of output quality. In equilibrium, quantity rationing may occur in which low price signals high quality /and visa-versa/, and high-quality firms ration demand initially. |
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