
doi: 10.2307/2555561
Sellers are often more able than consumers to test product quality. We show that whether such firms will voluntarily test quality and disclose what they learn depends in a paradoxical way upon the presence of mandatory disclosure rules: only if disclosure is mandatory will a seller not test and disclose. We then ask whether it is even desirable for consumers to be informed about quality at the time they purchase. We show that if information about product quality can be obtained only after all production decisions have been made, and if income effects are negligible, then consumers andfirms will agree that a regime in which consumers are uninformed (informed) is preferable to a regime in which they are informed (uninformed) if income and quality are complements (substitutes) in utility. Consumers and firms can disagree-in either way-about which regime is better if income effects are not negligible.
| selected citations These citations are derived from selected sources. This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically). | 159 | |
| popularity This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network. | Top 1% | |
| influence This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically). | Top 1% | |
| impulse This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network. | Average |
