Notes on "Asymmetric Information and Consumer Demand" (Ismagilova G. N. ; Danilina E. I. ; Gafurov I. R. ; Ismagilov R. I. ; Safiullin L. N.)

Asymmetric Information and Consumer Demand

Ismagilova G. N. ; Danilina E. I. ; Gafurov I. R. ; Ismagilov R. I. ; Safiullin L. N.

8300 defect for UNSW Asian Social Science, 01 November 2014, Vol.10(24) [Peer Reviewed Journal]

“study the peculiarities of the formation the consumer demand for durable goods, the so-called experience goods in markets with asymmetric information”

“Conclusion

 The nature of information asymmetry in the markets of durable goods is that in addition to the well-known

nature of the uneven distribution of information of the quality, it’s found out an uneven distribution of

information between producers and consumers of the market share of high-quality goods and low-quality goods.

A direction of reducing information asymmetry is proposed to the market shares of goods of high quality and

low quality based on distinguishing producers of high-quality goods and low-quality goods by consumers and by

sharing of price and advertising signals of quality. In this case, it is determined that with increasing information

asymmetry there is a reduction of the consumer share of high-quality goods compared with low-quality goods,

which is accompanied by a shift of the resulting curve asymmetric demand towards the demand curve of

low-quality goods and on the contrary. Furthermore, it is found out that the resulting curve of asymmetric

demand intersects the curves of the supply of high-goods and low-quality goods in the points causing the two

equilibriums:

Dаи(p) = Sk(p) , Dаи(p) = Sн(p)  (5)

the equilibrium at the level of prices p1  and volumes Qk  of high-quality goods and the equilibrium at the level of

prices p2  and volumes Qн  of low-quality goods. This explains the differentiation of goods by quality in markets

with incomplete information.”