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Asymptotic Efficiency in Stackelberg Markets with Incomplete Information

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Jianbo Zhang
Zhentang Zhang
Abstract

This paper examines the asymptotic (in)efficiency of Stackelberg markets with incomplete information. Firms who are early in the queue make their quantity choices based on limited information and their output choices are likely to deviate from those optimal under complete information. Due to the presence of both payoff externality and information externality, the output deviations of early firms have a lasting effect on all subsequent output decisions. Consequently, the total market output diverges from the competitive equilibrium output even as the number of firms goes to infinity. That is, Stackelberg markets with incomplete information are asymptotically inefficient with probability one.

ZUSAMMENFASSUNG - (Asymptotische Effizienz in Stackelberg-Märkten mit unvollständiger Information)
In diesem Beitrag wird die asymptotische (In-)Effizienz von Stackelberg-Märkten mit unvollständiger Information untersucht. Unternehmen, die frühzeitig auf den Markt kommen, bestimmen ihre Ausbringungsmengen unter unvollständiger Information. Aus diesem Grunde sind ihre Mengenentscheidungen im allgemeinen verschieden von den optimalen Ausbringungsmengen unter vollständiger Information. Auszahlungswirksame Externalitäten und Informationsexternalitäten bewirken, daß die Mengenentscheidungen der frühzeitig auf den Markt treffenden Unternehmen zu pfadabhängigen Mengen -entscheidungen nachfolgender Unternehmen führen. Im Ergebnis ist dann die gesamte Ausbringungsmenge aller Unternehmen verschieden von dem Konkurrenzgleichgewicht - selbst dann, wenn die Anzahl der Unternehmen gegen unendlich strebt. Das heißt, Stackelberg- Märkte mit unvollständiger Information sind asymptotisch ineffizient mit der Wahrscheinlichkeit eins.

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Paper provided by Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) in its series CIG Working Papers with number FS IV 99-07.

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Length: 32 pages
Date of creation: May 1999
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Publication status: Published in M. R. Baye/J. P. Nelson (eds.): Advances in Applied Microeconomics, Vol. 10, JAI, 2001, pp. 185-202.
Handle: RePEc:wzb:wzebiv:fsiv99-07

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