Una nota sui problemi di selezione avversa nei mercati oligopolistici
A Note on Adverse Selection in Oligopolistic Markets (di Riccardo Martina, Salvatore Piccolo) - ABSTRACT: This paper analyzes the effects of adverse selection in oligopolistic markets. The note is aimed at characterizing the relationship between competition and market distortions entailed by adverse selection. First, we examine the case of a monopolistic firm where the owner delegates the production of a good to a manager who possesses private information on the technology (marginal cost). Second, we extend the analysis to the case of Cournot competition with N vertical hierarchies. In this framework, we show that the contract implemented within each owner-manager pair entails quantity distortion and makes consumers worse off with respect to the complete information framework. However, we show that despite of the allocative inefficiency due to adverse selection it may be the case that all the owners are better-off with respect to the case of incomplete information. This effect is due to the rise in marginal costs entailed by the presence of an informational rent that each owner must pay in order to extract the information from the agent. Finally, we show that in a Stackelberg game where firms’ marginal costs are perfectly correlated, the effects of adverse selection are negligible since a signalling issue arises. More specifically, the owner of the firm acting as a leader signals the realization of the marginal costs to her competitors (owners of the follower firms) through the contract offered to the manager. It follows that, in this setting, a second mover advantage may arise at equilibrium.
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.
Volume (Year): 2003/81 (2003)
Issue (Month): 81 ()
|Contact details of provider:|| Web page: http://www.francoangeli.it/riviste/sommario.asp?IDRivista=59|
|Order Information:|| Web: http://www.francoangeli.it/riviste/Elenco_Prodotti.aspx?startCode=DC Email: |
When requesting a correction, please mention this item's handle: RePEc:fan:steste:v:html10.3280/ste2003-081002. 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: (Angelo Ventriglia)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.