ABSTRACT
Oneof themost commonassumptionsmade in economicmodelling is that all economic agents have complete information. Chapter 15 describes different factors affecting the producer’s motivation to give information to consumers in the form of advertising. We are now going to take a somewhat broader look at the problem of information (or the lack thereof) between consumers and producers. In fact, we are going to assume that the producer does not advertise at all. Instead, if it is the case that the producer has some information about the product being sold which the consumer does not have, how does this affect the type of good which the producer sells and the price at which that good is sold?
