Rivalry information acquisition and disclosure

Xinyu Li*, Ronald Peeters

*Corresponding author for this work

    Research output: Contribution to journalArticleAcademicpeer-review

    6 Citations (Scopus)

    Abstract

    In the recent past, there have been numerous scandals around poor product qualities various industries. Although it can be easily rationalized why bad practices have not been reported by the inflictors themselves, it is more difficult to understand why the non-inflicting competitors did not report their rivals' acts. In this paper, we study these competitors' incentives to acquire and to disclose information on the quality of their rivals' products and question when we can leave the information disclosure process to the competitive pressure of markets and when there is a need for governmentale intervention. We find that low quality levels can be disclosed in markets that exhibit negative spill-over effects, but should not be expected to be disclosed in markets that exhibit a Positive spill-over effect. A regulatory policy on quality testing and disclosure may be more effective in the latter type of market.

    Original languageEnglish
    Pages (from-to)610-623
    Number of pages14
    JournalJournal of Economics & Management Strategy
    Volume26
    Issue number3
    DOIs
    Publication statusPublished - 2017

    Keywords

    • QUALITY
    • COMPETITION
    • DIFFERENTIATION
    • LEMONS
    • PRICE

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