Opaque selling

•We study “opaque” selling in multiproduct environments -a marketing practice in which sellers strategically withhold product information by keeping important characteristics of their products hidden until after purchase.•We show that a monopolist will always use opaque selling, but it is not first-...

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Bibliographic Details
Published in:Information economics and policy 2020-09, Vol.52, p.100869, Article 100869
Main Authors: Anderson, Simon P., Celik, Levent
Format: Article
Language:English
Subjects:
Consumer goods
Marketing
Monopolies
Opaque products
Price discrimination
Product differentiation
Product line design
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Summary:•We study “opaque” selling in multiproduct environments -a marketing practice in which sellers strategically withhold product information by keeping important characteristics of their products hidden until after purchase.•We show that a monopolist will always use opaque selling, but it is not first-best optimal to do so.•Opaque selling might be used at the constrained optimum (with the monopolist’s pricing behavior taken as given).•For linear disutility costs, it is optimal for a monopolist to offer single opaque product. We study “opaque” selling in multiproduct environments – a marketing practice in which sellers strategically withhold product information by keeping important characteristics of their products hidden until after purchase. We show that a monopolist will always use opaque selling, but it is not first-best optimal to do so. However, opaque selling might be used at the constrained optimum (with the monopolist’s pricing behavior taken as given). For linear disutility costs, it is optimal for a monopolist to offer a single opaque product.
ISSN:0167-6245
1873-5975
DOI:10.1016/j.infoecopol.2020.100869