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Drugs, Showrooms and Financial Products: Competition and Regulation When Sellers Provide Expert Advice
2016
Social Science Research Network
We consider a market in which sellers can exert an informationgathering effort to advise buyers about which of two goods best fits their needs. Sellers may steer buyers towards the higher margin good. We show that for sellers to collect and reveal information, profits on both goods must be sufficiently close to each other, i.e., lie within an implementability cone, which competition or regulation may ensure. Instruments to do so vary with the context. Controlling market power while improving
doi:10.2139/ssrn.2877214
fatcat:uwunohu3dzct7f6norx4rf45ri