Information exchange in a Cournot duopoly with nonlinear demand function
AbstractWe study information sharing in a Cournot duopoly with isoelastic demand function, when the elasticity is uncertain. This is one of the first attempts to analyze the role of nonlinearity in such a framework. We found important results about the profitability of sharing informations when marginal costs are high and/or the variance between elasticity values is low. From the point of view of welfare considerations, not sharing information seems to be the best scenario.
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Bibliographic InfoPaper provided by University of Pavia, Department of Economics and Management in its series DEM Working Papers Series with number 049.
Length: 16 pages
Date of creation: Sep 2013
Date of revision:
Information exchange; Cournot duopoly; Hyperbolic demand;
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- David Collie, 2004. "Collusion and the elasticity of demand," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-6.
- Tramontana, Fabio, 2010. "Heterogeneous duopoly with isoelastic demand function," Economic Modelling, Elsevier, vol. 27(1), pages 350-357, January.
- Lode Li, 1985. "Cournot Oligopoly with Information Sharing," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 521-536, Winter.
- Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
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