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Information Aggregation Under Strategic Delay

Author

Listed:
  • Hikmet Gunay

    (University of Manitoba)

Abstract

In this paper, we show that consumers delay their buying to learn the unknown quality of a product. Agents receive imperfect but informative signals about the unknown quality. Then, each one simultaneously decides whether or not to buy the product in one of the two periods. Consumers with moderate tastes will strategically delay their buying to the second period even though they receive a good signal. They deduce the true quality by observing the mass of first period buyers. We avoid equilibrium non-existence problem by using agents with different private values.

Suggested Citation

  • Hikmet Gunay, 2008. "Information Aggregation Under Strategic Delay," Economics Bulletin, AccessEcon, vol. 12(23), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-08l00007
    as

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    References listed on IDEAS

    as
    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    2. Caplin, Andrew & Leahy, John, 1994. "Business as Usual, Market Crashes, and Wisdom after the Fact," American Economic Review, American Economic Association, vol. 84(3), pages 548-565, June.
    3. Nancy L. Stokey, 1979. "Intertemporal Price Discrimination," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 355-371.
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    Cited by:

    1. Hikmet Gunay, 2014. "Waiting for Signaling Quality," Southern Economic Journal, John Wiley & Sons, vol. 81(2), pages 364-386, October.
    2. Aoyagi, Masaki & Bhalla, Manaswini & Gunay, Hikmet, 2016. "Social learning and delay in a dynamic model of price competition," Journal of Economic Theory, Elsevier, vol. 165(C), pages 565-600.

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    More about this item

    Keywords

    Intertemporal price discrimination;

    JEL classification:

    • L0 - Industrial Organization - - General

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