Quality Disclosure With Information Value Under Competition

Along with modern economy high-speed development and technical progress, new products are increasingly emerging, especially in markets such as automo-bile, electronics, fashion and so on, which leads to the information asymmetry about product quality between sellers and consumers. Due to lack of information about the product quality, consumers’willingness of purchasing would decrease. To solve this information asymmetry, quality disclosure has become an effec-tive method through which sellers communicate with consumers, also become an important research direction.The sellers’disclosure strategies may be influenced by kinds of factors, such as disclosure cost and market structure. On the basis of predecessors’study a new factor is introduced, i.e., the information value, which means the extra value got by consumers from the disclosed information. It can to a certain extent incentive sellers to disclose more information, in turns affect the sellers’utility, social welfare and consumer surplus.As a benchmark, we first consider a monopolistic case. The seller’s equi-librium disclosure strategy and ex ante utility are obtained, respectively. The result shows that the information value is of special stimulation to sellers dis-closure, since it can counteract the disclosure cost partly. Then two duopoly cases, containing a simultaneous disclosure case and a sequential disclosure case, are considered, respectively. The result indicates that the seller discloses less information than that in the monopolistic case due to competition. Moreover, compared to the simultaneous disclosure case, in the sequential disclosure case, competition is softened and both sellers’ utilities and the social welfare are im-proved, but at the cost of sacrificing the consumer’s surplus. Benefiting from the competition, the social welfare and the consumer’s surplus are both bigger than that in the monopolistic case, yet the seller’s utility is smaller.