SFB 303 Discussion Paper No. A - 115

Author: Broecker, Thorsten
Title: A Monopolistic Market for Melons
Abstract: The paper analyses a monopolistic market which exhibits an adverse selection problem. The consumer is able to imperfectly monitor the two types of producers. It is demonstrated that the latter feature of the model induces the possibility that a monopolist can signal his type by the choice of the price which is his strategic variable. Equilibria which take this form of endogenous signaling into account are determined. They are related to stable equilibria.
Creation-Date: April 1987
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