Entry and espionage with noisy signals
We analyze the effect of industrial espionage on entry deterrence. We consider a monopoly incumbent who may expand capacity to deter entry, and a potential entrant who owns an Intelligence System. The Intelligence System (IS) generates a noisy signal based on the incumbentʼs actions. The potential entrant uses this signal to decide whether or not to enter the market. The incumbent may signal-jam to manipulate the likelihood of the noisy signals and hence affect the entrantʼs decisions. If the precision of the IS is commonly known, the incumbent benefits from his rivalʼs espionage. Actually, he benefits more the higher is the precision of the IS while the spying entrant is worse off with an IS of relatively high quality. When the IS quality is private information of the entrant, the incumbent is better off with an IS of high expected precision while the entrant benefits from one of high quality. In this case espionage makes the market more competitive.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Mirman,Leonard & Samuelson,Larry & Urbano,Amparo, .
"Duopoly signal jamming,"
Discussion Paper Serie B
199, University of Bonn, Germany.
- Gal-Or, Esther, 1986. "Information Transmission-Cournot and Bertrand Equilibria," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 85-92, January.
- Milgrom, Paul & Roberts, John, 1982.
"Predation, reputation, and entry deterrence,"
Journal of Economic Theory,
Elsevier, vol. 27(2), pages 280-312, August.
- Paul Milgrom & John Roberts, 1980. "Predation, Reputation, and Entry Deterrence," Discussion Papers 427, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Paul Milgrom & John Roberts, 1997. "Predation, reputation , and entry deterrence," Levine's Working Paper Archive 1460, David K. Levine.
- Raith, Michael, 1996. "A General Model of Information Sharing in Oligopoly," Journal of Economic Theory, Elsevier, vol. 71(1), pages 260-288, October.
- Matsui, Akihiko, 1989.
"Information leakage forces cooperation,"
Games and Economic Behavior,
Elsevier, vol. 1(1), pages 94-115, March.
- Caminal, Ramon, 1990. "A Dynamic Duopoly Model with Asymmetric Information," Journal of Industrial Economics, Wiley Blackwell, vol. 38(3), pages 315-33, March.
- Harrington, Joseph E, Jr, 1986. "Limit Pricing When the Potential Entrant Is Uncertain of Its Cost Function [Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis]," Econometrica, Econometric Society, vol. 54(2), pages 429-37, March.
- Sudipta Sarangi & Pascal Billand & Christophe Bravard & S. Chakrabarti, .
"Spying in Multi-market Oligopolies,"
Departmental Working Papers
2009-11, Department of Economics, Louisiana State University.
- Dolores Alepuz & Amparo Urbano, 2005. "Learning in asymmetric duopoly markets: competition in information and market correlation," Spanish Economic Review, Springer, vol. 7(3), pages 209-243, 09.
- Manishi Prasad & Peter Wahlqvist & Rich Shikiar & Ya-Chen Tina Shih, 2004. "A," PharmacoEconomics, Springer Healthcare | Adis, vol. 22(4), pages 225-244.
- Mailath, George J, 1989. "Simultaneous Signaling in an Oligopoly Model," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 417-27, May.
- Gal-Or, Esther, 1987. "First Mover Disadvantages with Private Information," Review of Economic Studies, Wiley Blackwell, vol. 54(2), pages 279-92, April.
- Michael H. Riordan, 1985. "Imperfect Information and Dynamic Conjectural Variations," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 41-50, Spring.
- Gal-Or, Esther, 1985. "Information Sharing in Oligopoly," Econometrica, Econometric Society, vol. 53(2), pages 329-43, March.
- Eilon Solan & Leeat Yariv, 1998.
"Games with Espionage,"
1257, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Ghemawat, Pankaj, 1984. "Capacity Expansion in the Titanium Dioxide Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 33(2), pages 145-63, December.
- Merrill Whitney & James Gaisford, 1999. "An Inquiry Into the Rationale for Economic Espionage," International Economic Journal, Taylor & Francis Journals, vol. 13(2), pages 103-123.
- Esther Gal-Or, 1988. "The Advantages of Imprecise Information," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 266-275, Summer.
- Jullien Bruno & Aghion Philippe & Paz Espinoza M, 1990.
"Dynamic duopoly with learning through market experimentation,"
CEPREMAP Working Papers (Couverture Orange)
- Aghion, Philippe & Espinosa, Maria Paz & Jullien, Bruno, 1993. "Dynamic Duopoly with Learning through Market Experimentation," Economic Theory, Springer, vol. 3(3), pages 517-39, July.
- Aghion, P. & Espinoza, M.P. & Jullien, B., 1990. "Dynamic Duopoly With Learning Through Market Experimentation," DELTA Working Papers 90-13, DELTA (Ecole normale supérieure).
- Ramon Caminal & Xavier Vives, 1996. "Why Market Shares Matter: An Information-Based Theory," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 221-239, Summer.
- Joseph E. Harrington Jr., 1987. "Oligopolistic Entry Deterrence under Incomplete Information," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 211-231, Summer.
- Wilson, Robert, 1992. "Strategic models of entry deterrence," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 10, pages 305-329 Elsevier.
- Hall, Elizabeth A., 1990. "An analysis of preemptive behavior in the titanium dioxide industry," International Journal of Industrial Organization, Elsevier, vol. 8(3), pages 469-484, September.
- S. Ho, 2008. "Extracting the information: espionage with double crossing," Journal of Economics, Springer, vol. 93(1), pages 31-58, February.
- Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:83:y:2014:i:c:p:127-146. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.