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Information Advantage in Cournot Oligopoly with Separable Information, or Nondifferentiable

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  • Haimanko, Ori

Abstract

Einy et al (2002) showed that information advantage of a firm is rewarded in any equilibrium of an incomplete information Cournot oligopoly, provided the inverse demand function is differentiable and monotonically decreasing, and costs are affine. We extend this result in two directions. We show first that a firm receives not less than its rival even if that firm's information advantage is only regarding payoff-relevant data, and not necessarily payoff-irrelevant "sunspots". We then show that there is at least one equilibrium which rewards firm's information advantage even with non-differentiable, but concave, inverse demand function. Under certain conditions, these results hold even with always non-negative inverse demand functions.

Suggested Citation

  • Haimanko, Ori, 2009. "Information Advantage in Cournot Oligopoly with Separable Information, or Nondifferentiable," Discussion Papers 2009-13, Graduate School of Economics, Hitotsubashi University.
  • Handle: RePEc:hit:econdp:2009-13
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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/17650/1/070econDP09-13.pdf
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    Cited by:

    1. Luo, Jianli, 2012. "Information acquisition under uncertainty: The case of labor-managed and profit-maximizing firms coexist," Economic Modelling, Elsevier, vol. 29(6), pages 2527-2532.

    More about this item

    Keywords

    Oligopoly; Incomplete Information; Information advantage; Bayesian Cournot; Equilibrium; Sunspots; Non-differentiability; Inverse demand;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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