Information Acquisition and Relative Efficiency of Competitive, Oligopoly and Monopoly Markets
AbstractThis paper analyzes the relative efficiency of a competitive equilibrium against Cournot oligopoly and monopoly equilibria when firms have diverse private information about the stochastic market demand. When firms have information of the same precision, the competitive equilibrium yields a larger expected welfare. However, when information is costly, Cournot oligopoly and monopoly firms acquire more information and, hence, may yield a larger expected welfare than the competitive firms under certain conditions. The author also finds that competitive firms acquire less than the efficient level of information while Cournot oligopoly and monopoly firms may acquire more than the efficient level. Copyright 1995 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Bibliographic InfoArticle provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 36 (1995)
Issue (Month): 2 (May)
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- Güth, Sandra & Güth, Werner & Müller, Wieland, 2000. "Private information, risk aversion, and the evolution of market research," SFB 373 Discussion Papers 2000,113, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Hurkens, Sjaak & Vulkan, Nir, 2001.
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"Endogenous Acquisition of Information on Consumer Willingness to Pay in a Product Differentiated Duopoly,"
Department of Economics Working Papers
01-03, Stony Brook University, Department of Economics.
- Qihong Liu Konstantinos Serfes, 2001. "Endogenous Acquisition Of Information On Consumer Willingness To Pay In A Product Differentiated Duopoly," Industrial Organization 0110001, EconWPA.
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- Esther Hauk & Sjaak Hurkens, 2001.
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