Tourist-trap model · Many souvenir shops Guidebook tells distribution of prices (i.e. broadly something like this 5% of stores charge price =10, 95% charge price =20 and so on Costs tourist c in time and expenses to visit a shop and check price or buy(this is what defines the lack of information hence for c =o all the results of standard Bertrand should hold). Lack of information is same thing as saying it is costly to obtain and or process information If price=p, costs p +c if tourist buys from first store and p+ 2c if tourist buys from second storeTourist-trap Model • Many souvenir shops • Guidebook tells distribution of prices (i.e. broadly something like this 5% of stores charge price =10, 95% charge price =20 and so on). • Costs tourist c in time and expenses to visit a shop and check price or buy (this is what defines the lack of information. Hence for c =0 all the results of standard Bertrand should hold). Lack of information is same thing as saying it is costly to obtain and or process information. • If price = p, costs p + c if tourist buys from first store and p + 2c if tourist buys from second store