One of the most basic principles in economics is that competitive
pressure promotes efficiency. However, this pressure can also have
a dark side because it makes firms reluctant to act on private
information that is unpopular with consumers. As a result, firms
that possess superior information about the consequences of their
actions for consumers' welfare may choose not to use it. We develop
this idea in a simple model of delegated investment in which agents
are fully rational and risk neutral, and agency problems are
absent. We show that competitive pressure obliges firms to make
inefficient decisions when their information advantage over
consumers is relatively small. This result could be applied to a
broad range of economically important situations.
General
Imprint: |
Bibliogov
|
Country of origin: |
United States |
Release date: |
February 2013 |
First published: |
February 2013 |
Authors: |
Jason G. Cummins
|
Dimensions: |
246 x 189 x 2mm (L x W x T) |
Format: |
Paperback - Trade
|
Pages: |
38 |
ISBN-13: |
978-1-288-71556-5 |
Categories: |
Books >
Social sciences >
Politics & government >
General
|
LSN: |
1-288-71556-0 |
Barcode: |
9781288715565 |
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