Arrogance Can Be a Virtue: Overconfidence, Information Acquisition, and Market Efficiency

2005 ◽  
Author(s):  
K. Jeremy Ko ◽  
Zhijian (James) Huang
Keyword(s):  
Market Efficiency ◽  
Information Acquisition

scholarly journals Pricing Network Effects: Competition

2020 ◽  
Vol 12 (3) ◽  
pp. 1-32
Author(s):  
Itay P. Fainmesser ◽  
Andrea Galeotti
Keyword(s):  
Market Efficiency ◽  
Information Acquisition ◽  
Network Effects ◽  
Consumer Surplus ◽  
Consumer Product ◽  
Strategic Complements ◽  
Oligopoly Markets ◽  
Price Discriminate ◽  
Other Consumers

We study the practice of influencer marketing in oligopoly markets and its effect on market efficiency. In our model, each consumer is influenced by choices of a subset of other consumers. Firms gather information on consumers’ influence and price discriminate using this information. In equilibrium, firms charge premia/subsidize below-/ above-average-influential consumers; the premia/discounts depend on the strength of network effects and on how much information firms have on consumers’ influence. Influencer marketing leads to inefficient consumer-product matches. Firms’ investments in information are strategic complements, leading to a race for information acquisition that erodes welfare and firms’ profits but increases consumer surplus. (JEL D11, D21, D43, D83, D85, L13, M31)

Market Efficiency in an Irrational World

CFA Digest ◽  
2000 ◽  
Vol 30 (3) ◽  
pp. 58-59
Author(s):  
Roger Ignatius
Keyword(s):  
Market Efficiency
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