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Observable and Unobservable Investment Information in Multiple Markets

Author

Listed:
  • Yoshikazu Ishinagi

    (Department of International Relations, Kobe City University of Foreign Studies, Kobe, Japan)

  • Joonghwa Oh

    (Faculty of Business Administration, Setsunan University, Osaka, Japan)

Abstract

This study considers the effects of disclosure conditions on firms' investment decisions when facing an identical competitor in multiple markets. Assuming that there are congestion costs between multiple investments to reduce marginal cost for each market, this study focuses on the cases where the disclosure conditions may differ by market. Like previous studies on single Cournot competition, these results show that firms invest more in the observable investment markets than in the unobservable markets under symmetric disclosure conditions. However, firms invest more in the unobservable market if there are asymmetric disclosure conditions.

Suggested Citation

  • Yoshikazu Ishinagi & Joonghwa Oh, 2024. "Observable and Unobservable Investment Information in Multiple Markets," Economic Analysis Letters, Anser Press, vol. 3(3), pages 1-9, September.
    • Handle: RePEc:bba:j00004:v:3:y:2024:i:3:p:1-9:d:321
    as

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    References listed on IDEAS

    as
    1. Anil Arya & Hans Frimor & Brian Mittendorf, 2010. "Discretionary Disclosure of Proprietary Information in a Multisegment Firm," Management Science, INFORMS, vol. 56(4), pages 645-658, April.
    2. Michael Alles & Srikant Datar, 1998. "Strategic Transfer Pricing," Management Science, INFORMS, vol. 44(4), pages 451-461, April.
    3. James A. Brander & Barbara J. Spencer, 1983. "Strategic Commitment with R&D: The Symmetric Case," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 225-235, Spring.
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