Transparency (market)
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This article may require cleanup to meet Wikipedia's quality standards. Please improve this article if you can. (December 2007) |
In economics, a market is transparent if much is known by many about:
- What products, services or capital assets are available.
- What price.
- Where.
There are two types of price transparency: 1) I know what price will be charged to me, and 2) I know what price will be charged to you. The two types of price transparency have different implications for differential pricing.[1]
This is a special case of the topic at transparency (humanities).
A high degree of market transparency can result in disintermediation due to the buyer's increased knowledge of supply pricing.
Transparency is important since it is one of the theoretical conditions required for a free market to be efficient.
Price transparency can, however, lead to higher prices, if it makes sellers reluctant to give steep discounts to certain buyers, or if it facilitates collusion.
[edit] See also
- Shell corporation
- Underground economy
- Information
- Efficient market
- Transfer pricing
- Market anomaly
- International Sugar Organization
- Consumer protection
- Consumer organization
- Competition regulator
- Extractive Industries Transparency Initiative (or EITI)
[edit] References
- ^ Would Greater Transparency and Uniformity of Health Care Prices Benefit Poor Patients?, Margaret K. Kyle and David B. Ridley. Health Affairs. 2007. Vol. 26, No. 5: 1384-1391.
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