Our findings suggest two market regulation strategies to curb obfuscation: A) Enhance price comparability, e.g. via digital tools or limiting complex pricing features; B) Reduce barriers for new, less known competitors. Both lead to more competition & improved consumer welfare.

Our model helps to explain the shift in mobile subscription markets from complex add-on to simpler, fixed pricing schemes. It suggests digital tech lowering info costs of consumers could have prompted this shift, favoring transparent pricing as the dominant firm strategy.

Key takeaway: In markets with high information costs of consumers & similar firms, obfuscation is optimal for firms, reducing transparency & competition. However, lower info costs or new market entrants can shift the equilibrium towards more transparency and lower prices.