Ignorance is bliss as trade policy

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


Consider domestic consumers that purchase from foreign firms. A presumption would be that consumers prefer being informed when quality is uncertain and exogenous. However, in a multifirm framework based on previous models, consumers can be worse off if they are informed of the quality. Further, in the Salopcircle model, consumers may prefer not learning even though expected high-quality output is greater with learning. Moreover, the possibility that consumers prefer uncertainty increases with the probability that products are of low quality. Essentially, the benefit of screening quality (better matching) can be less than its cost (higher prices from market segmentation).

Original languageEnglish
Pages (from-to)616-624
Number of pages9
JournalReview of International Economics
Issue number4
StatePublished - Nov 1998


  • Consumption behavior
  • Economic theory
  • Quality control
  • Trade policy

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development


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