Work

The Economics of Advice

Year: 2025

Type: article

Abstract: A consumer wants to buy one of three different products. An expert observes which of the three products is the best match for the consumer. Under linear prices a monopolistic expert may truthfully reveal, may partially reveal, and may not reveal at all her information. The outcome is inefficient; moreover, the consumer gets some of the surplus. With a two-part tariff the expert truthfully reveals her information. The outcome is efficient and the expert appropriates the entire surplus. If experts are competitive, they also truthfully reveal; here all the surplus goes to consumers.

Source: Review of Industrial Organization

DOI: 10.1007/s11151-025-10012-6

Authors: Winand Emons, Severin Lenhard

Institutions: University of Bern, University of St.Gallen, Competition Commission Secretariat

Language: English

Topic: Merger and Competition Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,190

OpenAlex ID: W4408077933

FWCI:

Cites: 24

Cited by:

Related to: 10