If the agencies cannot distinguish, this can lead to commoditization regarding Ft products and zero wealth transfers

If companies is separate their products or services well enough to ensure pricing more than marginal can cost you, and positive money transfers will likely be produced.

When the mainstream phase implies homogeneous products, we have seen that prices are reduced towards marginal costs, rendering the psychological distance costs t i irrelevant. Wealth transfers are zero, resulting in aisle S m a i n < S l a b e l ? 1 3 ( 2 t c t + t f t ) ? 2 F > 0 . Similar results follow when comparing wealth transfers per firm S i j and per FT product sold s ? i j . The condition implies that the amount of wealth transfers generated in a mainstream market with homogeneous products is smaller as long as wealth transfers in the labeling phase are positive. Continue Reading