Secret information acquisition in Cournot markets
AbstractTwo-stage game models of information acquisition in stochastic oligopolies require the unrealistic assumption that firms observe the precision of information chosen by their competitors before determining quantities. This paper analyzes secret information acquisition as a one-stage game. Relative to the two-stage game firms are shown to acquire less information. Policy implications based on the two-stage game yield, therefore, too high taxes or too low subsidies for research activities. For the case of heterogeneous duopoly it is shown that comparative statics results partly depend on the observability assumption.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 233.
Date of creation: Mar 1996
Date of revision: Aug 1997
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Web page: http://www.econ.upf.edu/
Information acquisition; oligopoly; uncertainty; Bayesian equilibrium;
Other versions of this item:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-09-14 (All new papers)
- NEP-GTH-1998-09-14 (Game Theory)
- NEP-MIC-1998-09-14 (Microeconomics)
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