Learning and Using Competitor Information in Mwanza, Tanzania

Firms are typically modeled as profit-maximizing agents who know and use information. In low-income countries, information frictions are more salient than typically assumed and many firms are run by a single person. In this project I study whether small urban firms value, learn, and use information about their competitors. First, I measure how well these firms know the prices at other firms. Next, I elicit their willingness to pay for this price information. Contingent on this valuation, I randomly share price information with some firms. I measure whether and how firms change their prices upon learning the prices at their competition.