Abstract: Consumers always use a product’s price as a signal of the product's quality. Due to the difference in consumers' perception of product quality, there is an information gap between enterprises and consumers, which provides space for enterprises to use fake quality information. When the product quality information owned by enterprises and consumers is asymmetric, the issue of monopolistic enterprises using fake quality information is studied. By constructing the consumer utility model of differentiated products and the profit model of enterprises under different quality information strategies, the motivation of enterprises using fake quality information is discussed. The extra marketing effort cost and the punishment cost using fake quality information are introduced to see how the different costs will influence the fake quality information strategy of the enterprise. The results show that whether the enterprise uses fake quality information not only depends on the extra marketing cost but also the punishment cost. What’s more, the enterprise prefer to use fake quality information just for high or low quality product rather than for both quality products simultaneously.

Key words: asymmetry information; fake quality information; vertical differentiation; extra marketing cost; punishment cost