Secret information acquisition in Cournot markets
Two-stage game models of information acquisition in stochastic oligopolies require the assumption that firms observe the precision of information chosen by their competitors before determining quantities. This paper analyzes secret information acquisition as a one-stage game. Relative to the two-stage game firms are shown to acquire less information. Policy implications based on the two-stage game yield, therefore, too high taxes or too low subsidies for research activities. For the case of heterogeneous duopoly we briefly discuss comparative statics results.
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Volume (Year): 18 (2001)
Issue (Month): 3 ()
|Note:||Received: August 9, 1999; revised version: May 31, 2000|
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References listed on IDEAS
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- Sjaak Hurkens & Nir Vulkan, 1996.
"Information acquisition and entry,"
Economics Working Papers
155, Department of Economics and Business, Universitat Pompeu Fabra.
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"Optimal Research for Cournot Oligopolists,"
563, California Institute of Technology, Division of the Humanities and Social Sciences.
- Jean-Pierre Ponssard, 1979. "The Strategic Role of Information on the Demand Function in an Oligopolistic Market," Management Science, INFORMS, vol. 25(3), pages 243-250, March.
- Hwang Hae-shin, 1993. "Optimal Information Acquisition for Heterogenous Duopoly Firms," Journal of Economic Theory, Elsevier, vol. 59(2), pages 385-402, April.
- Milgrom, Paul R, 1981. "Rational Expectations, Information Acquisition, and Competitive Bidding," Econometrica, Econometric Society, vol. 49(4), pages 921-943, June.
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