2026-04-17T20:27:52Zhttps://recercat.cat/oai/request

oai:recercat.cat:10230/447132025-12-13T00:31:15Zcom_2072_6col_2072_452953

00925njm 22002777a 4500 dc Asriyan, Vladimir author Foarta, Dana author Vanasco, Victoria author 2024-11-14T10:09:43Z 2024-11-14T10:09:43Z 2019-03-20 2024-11-14T10:06:14Z We study the joint determination of product quality and complexity in a rational setting. We introduce a novel notion of complexity, which affects how difficult it is for an agent to acquire information about product quality. In our model, an agent can accept or reject a product proposed by a designer, who can affect the quality and the complexity of the product. Examples include banks that design financial products that they offer to retail investors, or policymakers who propose policies for approval by voters. We find that complexity is not necessarily a feature of low quality products. While an increase in alignment between the agent and the designer leads to more complex but better quality products, higher product demand or lower competition among designers leads to more complex and lower quality products. Our findings produce novel empirical implications on the relationship between quality and complexity, which we relate to evidence within the context of financial products and regulatory policies. product design; information frictions; information transmission; signaling; complexity; regulation; financial products. Macroeconomics and International Economics The good, the bad and the complex: Product design with imperfect information