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Learning about common and private values in oligopoly

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  • Dan Bernhardt
  • Bart Taub

Abstract

type="main"> We characterize a duopoly buffeted by demand and cost shocks. Firms learn about shocks from common observation, private observation, and noisy price signals. Firms internalize how outputs affect a rival's signal, and hence output. We distinguish how the nature of information —public versus private—and of what firms learn about—common versus private values—affect equilibrium outcomes. Firm outputs weigh private information about private values by more than common values. Thus, prices contain more information about private-value shocks.

Suggested Citation

  • Dan Bernhardt & Bart Taub, 2015. "Learning about common and private values in oligopoly," RAND Journal of Economics, RAND Corporation, vol. 46(1), pages 66-85, March.
  • Handle: RePEc:bla:randje:v:46:y:2015:i:1:p:66-85
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    File URL: http://hdl.handle.net/10.1111/1756-2171.12077
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    References listed on IDEAS

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    Cited by:

    1. Thomas D. Jeitschko & Ting Liu & Tao Wang, 2016. "Information Acquisition, Signaling and Learning in Duopoly," Department of Economics Working Papers 16-07, Stony Brook University, Department of Economics.

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