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Information Advantage in Cournot Oligopoly

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  • Einy, Ezra
  • Moreno, Diego
  • Shitovitz, Benyamin

Abstract

We model an oligopolistic industry where a number of firms that are asymmetrically informed about the environment compete via quantities, and we study how the information available to a firm affects its equilibrium profits. Indeed we find that if all firms have access to the same constant returns to scale technology, in any Bayesian equilibrium the information advantage of a firm is rewarded.
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  • Einy, Ezra & Moreno, Diego & Shitovitz, Benyamin, 2002. "Information Advantage in Cournot Oligopoly," Journal of Economic Theory, Elsevier, vol. 106(1), pages 151-160, September.
    • Handle: RePEc:eee:jetheo:v:106:y:2002:i:1:p:151-160
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    Cited by:

    1. Ezra Einy & Ori Haimanko & Diego Moreno & Aner Sela & Benyamin Shitovitz, 2013. "Tullock Contests With Asymmetric Information," Working Papers 1303, Ben-Gurion University of the Negev, Department of Economics.
    2. Richter, Jan, 2013. "Incomplete Information in Cournot Oligopoly: The Case of Unknown Production Capacities," EWI Working Papers 2013-1, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    3. Richter, Jan & Viehmann, Johannes, 2014. "The value of information in explicit cross-border capacity auction regimes in electricity markets," Energy Policy, Elsevier, vol. 70(C), pages 74-84.
    4. A. Aiche & E. Einy & O. Haimanko & D. Moreno & A. Sela & B. Shitovitz, 2019. "Information in Tullock contests," Theory and Decision, Springer, vol. 86(3), pages 303-323, May.
    5. Einy, Ezra & Haimanko, Ori & Moreno, Diego & Shitovitz, Benyamin, 2010. "On the existence of Bayesian Cournot equilibrium," Games and Economic Behavior, Elsevier, vol. 68(1), pages 77-94, January.
    6. Lin, C.Y. Cynthia & Muehlegger, Erich J., 2009. "Heuristic Strategies, Firm Behavior and Industry Information," Working Papers 225898, University of California, Davis, Department of Agricultural and Resource Economics.
    7. Oriol Carbonell-Nicolau & Richard P. McLean, 2018. "On the Existence of Nash Equilibrium in Bayesian Games," Mathematics of Operations Research, INFORMS, vol. 43(2), pages 100-129, February.
    8. Marta Rocha & Thomas Greve, 2021. "Contracting in a Market with Differential Information," Journal of Industry, Competition and Trade, Springer, vol. 21(2), pages 193-210, June.
    9. Lemus, Ana B. & Moreno, Diego, 2020. "Strategic incentives for keeping one set of books under the Arm’s Length Principle," Mathematical Social Sciences, Elsevier, vol. 106(C), pages 78-90.
    10. De Borger, Bruno & Fosgerau, Mogens, 2012. "Information provision by regulated public transport companies," Transportation Research Part B: Methodological, Elsevier, vol. 46(4), pages 492-510.
    11. Aner Sela & Ezra Einy & 0ri Haimanko & Diego Moreno & Avishay Aiche & Benyamin Shitovitz, 2016. "Information Advantage in Common-Value Classic Tullock Contests," Working Papers 1614, Ben-Gurion University of the Negev, Department of Economics.
    12. Einy, Ezra & Moreno, Diego & Shitovitz, Benyamin, 2003. "The value of public information in a Cournot duopoly," Games and Economic Behavior, Elsevier, vol. 44(2), pages 272-285, August.
    13. April Knill & Kristina Minnick & Ali Nejadmalayeri, 2006. "Selective Hedging, Information Asymmetry, and Futures Prices," The Journal of Business, University of Chicago Press, vol. 79(3), pages 1475-1502, May.
    14. Arya, Anil & Mittendorf, Brian, 2004. "Benefits of a slanted view: a discussion of 'disclosure bias'," Journal of Accounting and Economics, Elsevier, vol. 38(1), pages 251-262, December.
    15. Roy, Nilanjan, 2017. "Action revision, information and collusion in an experimental duopoly market," MPRA Paper 77033, University Library of Munich, Germany.
    16. Roy, Jaideep & Silvers, Randy & Sun, Ching-Jen, 2019. "Majoritarian preference, utilitarian welfare and public information in Cournot oligopoly," Games and Economic Behavior, Elsevier, vol. 116(C), pages 269-288.
    17. Andreas Szczutkowski, 2010. "The Social Value of Cost Information in a Monopolistically Competitive Economy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(2), pages 345-362, April.
    18. Aiche, Avishay & Einy, Ezra & Haimanko, Ori & Moreno, Diego & Sela, Aner & Shitovitz, Benyamin, 2018. "Tullock contests reward information advantages," Economics Letters, Elsevier, vol. 172(C), pages 34-36.
    19. Luo, Jianli, 2012. "Information acquisition under uncertainty: The case of labor-managed and profit-maximizing firms coexist," Economic Modelling, Elsevier, vol. 29(6), pages 2527-2532.
    20. Lin, C.-Y. Cynthia & Muehlegger, Erich J., 2013. "On the use of heuristics to approximate competitors’ private information," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 10-23.
    21. Chokler, Adi & Hon-Snir, Shlomit & Kim, Moshe & Shitovitz, Benyamin, 2006. "Information disadvantage in linear Cournot duopolies with differentiated products," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 785-793, July.
    22. Shlomit Hon‐Snir & Benyamin Shitovitz & Menahem Spiegel, 2010. "Bayesian Equilibrium in a Public Good Economy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(2), pages 387-398, April.
    23. Huang, Weihong, 2008. "Information lag and dynamic stability," Journal of Mathematical Economics, Elsevier, vol. 44(5-6), pages 513-529, April.

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