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Simultaneous Price Changes, Information Acquisition On Common Competitors And Welfare

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  • MINORU KITAHARA
  • TOSHIHIRO MATSUMURA

Abstract

We investigate a model where two firms choose whether to acquire information on a common competitor. We find that strategic complementarity on information acquisition exists, yielding multiple equilibria. In addition, we investigate welfare implication of information acquisition. We find that information acquisition reduces both consumer surplus and the total profits of the firms.

Suggested Citation

  • Minoru Kitahara & Toshihiro Matsumura, 2008. "Simultaneous Price Changes, Information Acquisition On Common Competitors And Welfare," Australian Economic Papers, Wiley Blackwell, vol. 47(4), pages 389-395, December.
    • Handle: RePEc:bla:ausecp:v:47:y:2008:i:4:p:389-395
    DOI: 10.1111/j.1467-8454.2008.00356.x
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    References listed on IDEAS

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    1. Masahiro Okuno-Fujiwara & Andrew Postlewaite & Kotaro Suzumura, 1990. "Strategic Information Revelation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 25-47.
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