Information, Prices and Buyer Entry
Abstract
Conventional wisdom suggests that information transparency about prices lowers prices and markups by intensifying seller competition. However, in markets with costly buyer entry, price transparency also draws in more buyers, increasing demand-side competition and putting upward pressure on prices. We show that this buyer entry effect may dominate, and prices and markups may rise with information transparency.
Fields of Study & Subjects
Merger and Competition Analysis
Consumer Market Behavior and Pricing
Economics of Agriculture and Food Markets
Publication details
- Journal / source
- Bank of Canada Research
- Publication date
- 3 March 2026
- Language
- EN