We consider a simple model of incomplete information in location theory. Two firms compete in a two stage framework: a sequential location stage and a price competition stage. Firm 1 knows both its own constant marginal cost technology and that of Firm 2, whereas the latter has incomplete information about firm 1's technology. The location stage turns out to be a monotonic signalling game and the unique D1 equilibrium is a pure strategy separating equilibrium if Firm 1's cost advantage is below some bound, and otherwise a pooling equilibrium if the prior probability that Firm 1 is of the low cost type is high, or a semi-pooling equilibrium if it is low. This surprising result is due to the fact that the location gap between the two types of Firm 1 is bounded because of natural economic reasons, which may prevent the separation of the two types. Hence, incomplete information matters: the equilibrium locations differ quite significantly from the full information equilibrium locations.
Nous proposons ici un modèle simple d'information incomplète en théorie de la localisation. Deux entreprises s'affrontent dans un contexte à deux étapes : une étape de localisation séquentielle et un étape de concurrence en prix. La firme 1 connaît sa technologie à coût marginal constant et celle de la firme 20501s cette dernière n'a qu'une information imparfaite de la technologie de sa concurrente. La concurrence de première étape s'avère être un jeu de signal monotone et l'équilibre D1 unique est un équilibre séparateur en stratégies pures si l'avantage de coût de la firme 1 est relativement faible et sinon, un équilibre mélangeant, si la probabilité a priori que la firme 1 soit de type coût faible est élevée, ou un équilibre semi-mélangeant, si cette probabilité est faible. Ce résultat surprenant est dû au fait que l'écart de localisation entre les firmes est naturellement borné, ce qui peut empêcher la séparation des types. Ainsi, les localisations d'équilibre d'information incomplète diffèrent significativement des localisations d'équilibre d'information complète.
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Find related papers by JEL classification: D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
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BOYER, Marcel & MOREAUX, Michel & MAHENC, Philippe, 1995.
"Entry Blockading Locations,"
Cahiers de recherche
9555, Universite de Montreal, Departement de sciences economiques.
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