Information acquisition and entry
Before firms decide whether to enter a new market or not, they have the opportunity to buy information about several variables that might affect the profitability of this market. Our model differs from the existing literature on endogenous information acquisition in two respects: (1) there is uncertainty about more than one variable, and (2) information is acquired secretly. When the cost of acquiring information is small, entry decisions will be as if there was perfect information. Equilibria where each firm acquires only a small amount of information are more robust than the socially undesirable equilibria where all firms gather all information. Examples illustrate the importance of assumptions (1) and (2).
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.:
- Bosch, A. & Sunder, S., 1994.
"Tracking the Invisible Hand: Convergence of Double Auctions to Competitive Equilibrium,"
GSIA Working Papers
1994-11, Carnegie Mellon University, Tepper School of Business.
- Antoni Bosch-Domenech & Shyam Sunder, 2000. "Tracking the Invisible Hand: Convergence of Double Auctions to Competitive Equilibrium," Computational Economics, Society for Computational Economics, vol. 16(3), pages 257-284, December.
- Antoni Bosch-Domènech & Shyam Sunder, 1996. "Tracking the invisible hand: Convergence of double auctions to competitive equilibrium," Economics Working Papers 91, Department of Economics and Business, Universitat Pompeu Fabra.
- Shyam NMI Sunder & Antoni Bosch-Domènech, 2001. "Tracking the Invisible Hand: Convergence of Double Auctions to Competitive Equilibrium," Yale School of Management Working Papers ysm204, Yale School of Management.
- Sala-i-Martin, Xavier, 1994.
"A Positive Theory of Social Security,"
CEPR Discussion Papers
1025, C.E.P.R. Discussion Papers.
- Chaim, F. & Kalai, E., 1991.
"Complexity Considerations and Market Behavior,"
4-91, Tel Aviv.
- Hwang Hae-shin, 1993. "Optimal Information Acquisition for Heterogenous Duopoly Firms," Journal of Economic Theory, Elsevier, vol. 59(2), pages 385-402, April.
- Vives, Xavier, 1988. "Aggregation of Information in Large Cournot Markets," Econometrica, Econometric Society, vol. 56(4), pages 851-76, July.
- Thierry Foucault, 1994. "Price formation and order placement strategies in a dynamic order driven market," Economics Working Papers 99, Department of Economics and Business, Universitat Pompeu Fabra.
- Li, Lode & McKelvey, Richard D. & Page, Talbot., 1985.
"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, 1995. "Information Acquisition and Relative Efficiency of Competitive, Oligopoly and Monopoly Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(2), pages 325-40, May.
When requesting a correction, please mention this item's handle: RePEc:upf:upfgen:155. 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: ()
If references are entirely missing, you can add them using this form.