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Business intelligence and multimarket competition

Author

Listed:
  • Pascal Billand

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

  • Christophe Bravard

    (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA [2016-2019] - Université Grenoble Alpes [2016-2019], UGA UFR FEG - Université Grenoble Alpes - Faculté d'Économie de Grenoble - UGA [2016-2019] - Université Grenoble Alpes [2016-2019])

  • Subhadip Chakrabarti

    (Subhadip Chakrabarti, School of Management and Economics - QUB - Queen's University [Belfast])

  • Sudipta Sarangi

    (LSU - Louisiana State University [BatonRouge], DIW Berlin - Deutsches Institut für Wirtschaftsforschung)

Abstract

We consider a multimarket framework where a set of firms compete on two oligopolistic markets. The cost of production of each firm allows for spillovers across markets, ensuring that output decisions for both markets have to be made jointly. Prior to competing in these markets, firms can establish business intelligence gathering links with other firms. A link formed by a firm generates two types of externalities for competitors and consumers. We characterize the business intelligence equilibrium networks and networks that maximize social welfare. By contrast with single-market competition, we show that in multimarket competition there exist situations where intelligence-gathering activities are underdeveloped with regard to social welfare and should be tolerated, if not encouraged, by public authorities.

Suggested Citation

  • Pascal Billand & Christophe Bravard & Subhadip Chakrabarti & Sudipta Sarangi, 2016. "Business intelligence and multimarket competition," Post-Print halshs-01212135, HAL.
    • Handle: RePEc:hal:journl:halshs-01212135
    DOI: 10.1111/jpet.12180
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    Citations

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    Cited by:

    1. Tao Wang, 2020. "Competitive Intelligence and Disclosure of Cost Information in Duopoly," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(3), pages 665-699, November.
    2. Adriana Gama & Isabelle Maret & Virginie Masson, 2019. "Endogenous heterogeneity in duopoly with deterministic one-way spillovers," Annals of Finance, Springer, vol. 15(1), pages 103-123, March.
    3. Alex Barrachina & Yair Tauman & Amparo Urbano, 2021. "Entry with two correlated signals: the case of industrial espionage and its positive competitive effects," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(1), pages 241-278, March.
    4. Cuong Le Van & Anh Ngoc Nguyen & Ngoc‐Minh Nguyen & Michel Simioni, 2018. "Growth strategy with social capital, human capital and physical capital—Theory and evidence: The case of Vietnam," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(5), pages 768-787, October.
    5. Barrachina, Alex & Forner-Carreras, Teresa, 2022. "Market must be defended: The role of counter-espionage policy in protecting domestic market welfare," Information Economics and Policy, Elsevier, vol. 58(C).
    6. Subhadip Chakrabarti & Robert P. Gilles & Emiliya Lazarova, 2021. "Stability of cartels in Multimarket Cournot oligopolies," Manchester School, University of Manchester, vol. 89(1), pages 70-85, January.
    7. Billand, Pascal & Bravard, Christophe & Joshi, Sumit & Mahmud, Ahmed Saber & Sarangi, Sudipta, 2023. "A model of the formation of multilayer networks," Journal of Economic Theory, Elsevier, vol. 213(C).
    8. Chen, Zhuoqiong, 2025. "Know thy enemy: Information acquisition in contests," European Economic Review, Elsevier, vol. 177(C).
    9. Grandjean, G. & Tellone, D. & Vergote, W., 2017. "Endogenous network formation in a Tullock contest," Mathematical Social Sciences, Elsevier, vol. 85(C), pages 1-10.

    More about this item

    Keywords

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    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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