The Design of Quality Disclosure Policy and the Limits to Competition
Bibliographic record
Abstract
We study a two-dimensional information design problem in a duopoly with vertical differentiation. A third-party designer, literal or metaphorical, designs a public joint signal structure to reveal product quality before firms compete in prices. The industry-optimal policy only reveals the quality ranking, which amplifies perceived differentiation, mitigates price competition, and yields socially optimal allocation. The consumer-optimal policy, to the contrary, intensifies competition by fully concealing the ranking. We further derive welfare-maximizing signal structures for arbitrary Pareto weights. The optimal policy takes one of the following forms: ranking, no-ranking, full revelation, or a combination of full revelation with either ranking or no-ranking policies. Our analysis illustrates how the optimal quality disclosure rule is shaped by both the relative weight on consumer welfare and industry profits and the price competition in response to the information revealed to consumers.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.018 | 0.062 |
| Meta-epidemiology (narrow) | 0.001 | 0.001 |
| Meta-epidemiology (broad) | 0.002 | 0.001 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.001 | 0.005 |
| Scholarly communication | 0.005 | 0.006 |
| Open science | 0.002 | 0.003 |
| Research integrity | 0.004 | 0.003 |
| Insufficient payload (model declined to judge) | 0.002 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".