Information Disclosure by Consumer and
Competition among Firms

This paper studies the effects of competition on consumer's information disclosure, multiproduct firms' product recommendation strategies, and the vertical and horizontal efficiency of the resulting equilibrium outcomes. To this end, we extend Ichihashi (2020, American Economic Review) to allow for duopoly. Our main finding is that competition removes the tradeoff between horizontal and vertical (in)efficiencies identified in Ichihashi (2020). There exists the consumer-optimal Bayes-correlated equilibrium in which both firms recommend the most-preferred product at the price equal to the marginal cost.