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The Strategic Role of Information on the Demand Function in an Oligopolistic Market

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  • Jean-Pierre Ponssard

    (Centre de Recherche en Gestion, Ecole Polytechnique, France)

Abstract

This paper investigates the incentives for cooperation in market surveys among competitive firms. The analysis relies on a game theoretic model. The main conclusion is that the value of information in a competitive market exhibits a sharp decrease as the number of firms that share the information increases. Thus, the advantage obtained through sharing the cost of a market survey may be upset by the loss due to the spreading of information among the competitors. The consumer's point of view is also studied showing that market surveys are advantageous in terms of consumer surplus, a usual indicator of the consumer's satisfaction.

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File URL: http://dx.doi.org/10.1287/mnsc.25.3.243
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Bibliographic Info

Article provided by INFORMS in its journal Management Science.

Volume (Year): 25 (1979)
Issue (Month): 3 (March)
Pages: 243-250

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Handle: RePEc:inm:ormnsc:v:25:y:1979:i:3:p:243-250

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Keywords: marketing; games/group decisions; information systems;

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Citations

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Cited by:
  1. Ezra Einy & Diego Moreno & Benyamin Shitovitz, 2002. "The Value Of Public Information In A Cournot Duopoly," Economics Working Papers we024617, Universidad Carlos III, Departamento de Economía.
  2. Johan Lagerlof, 2003. "Insisting on a Non-Negative Price: Oligopoly, Uncertainty, Welfare, and Multiple Equilibria," Industrial Organization 0304007, EconWPA.
  3. 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.
  4. Christophe Caron & Thierry Lafay, 2008. "How Risk Disciplines Pre-Commitment," Theory and Decision, Springer, vol. 65(3), pages 205-226, November.
  5. Sjaak Hurkens & Nir Vulkan, 2000. "Endogenous Private Information Structures," Econometric Society World Congress 2000 Contributed Papers 0613, Econometric Society.
  6. Yasuhiro Sakai & Akihiko Yoshizumi, 1991. "The impact of risk aversion on information transmission between firms," Journal of Economics, Springer, vol. 53(1), pages 51-73, February.
  7. 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.
  8. Sjaak Hurkens & Nir Vulkan, 1996. "Information acquisition and entry," Economics Working Papers 155, Department of Economics and Business, Universitat Pompeu Fabra.
  9. Eliane Catilina, 2002. "Information Acquisition in Cournot Markets: An (enhanced) two- Stage Approach," Game Theory and Information 0205005, EconWPA.
  10. Esther Hauk & Sjaak Hurkens, 1996. "Secret information acquisition in Cournot markets," Economics Working Papers 233, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1997.
  11. MortonI. Kamien, 1987. "The Value of Infommation in a Strategic Conflict," Discussion Papers 717, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  12. Jiang, Yingying & Yoneyama, Takau, 2008. "Economic conditions on exchange of technology and information : cournot's model applied to demand information risk in China," Hitotsubashi Journal of commerce and management, Hitotsubashi University, vol. 42(1), pages 17-28, January.
  13. Jacques-François Thisse & Jean J. Gabszewicz, 2000. "Microeconomic theories of imperfect competition," Cahiers d'Économie Politique, Programme National Persée, vol. 37(1), pages 47-99.
  14. Arturs Kalnins, 2006. "Markets: The U.S. Lodging Industry," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 203-218, Fall.
  15. Sjaak Hurkens & Nir Vulkan, 1999. "Endogenous information structures," Economics Working Papers 386, Department of Economics and Business, Universitat Pompeu Fabra.
  16. Tapan Biswas & Jolian McHardy, 2010. "Strategic behaviour of firms in a duopoly and the impact of extending the patenting period," Working Papers 2010014, The University of Sheffield, Department of Economics.
  17. Rafael, MONER-COLONQUES & Vicente, ORTS & José J., SEMPERE-MONERRIS, 2003. "The Strategic Role of Information Asymmetry on Demand for the Multinational Enterprise," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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