Information Acquisition in Cournot Markets: An (enhanced) two- Stage Approach
AbstractThis paper presents an alternative or enhanced approach to information acquisition in Cournot markets with stochastic demand in which the cost of information acquisition is endogenously determined by firms\222 information purchasing strategy. I propose a two-stage model in which in the first stage each firm decides whether it will join a coalition to purchase information and therefore share the cost of information acquisition, to individually purchase information, or to remain uninformed. In the second-stage firms engage in Cournot competition to choose output. The model I propose encompasses the main assumptions of the current view on information acquisition, mainly those related to the role of information and how it affects firms\222 profits. However, I will argue that by adding natural assumptions on oligopolists\222 behavior, I can offer a model that provides a better description of firms\222 actions and trade\226offs than the standard view. Keywords: Information Acquisition, Cournot Markets, Subgame Perfect Nash equilibrium, Strong Nash Equilibrium.
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Length: 43 pages
Date of creation: 05 Mar 2002
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Information Acquistion; Cournot Market; Strong Nash Equilibrium;
Find related papers by JEL classification:
- 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
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-06-13 (All new papers)
- NEP-GTH-2002-07-04 (Game Theory)
- NEP-MIC-2002-06-18 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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749, Cowles Foundation for Research in Economics, Yale University.
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