Competition and Public Information: A Note

Dirk Bergemann, Benjamin Brooks and Stephen Morris

No 2234, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We study price discrimination in a market in which two firms engage in Bertrand competition. Some consumers are contested by both firms, and other consumers are "captive" to one of the firms. The market can be divided into segments, which have different relative shares of captive and contested consumers. It is shown that the revenue-maximizing segmentation involves dividing the market into "nested" markets, where exactly one firm may have captive consumers.

Keywords: Price Competition; Bertrand Competition; Price Count; Price Quote; Information Structure; Bayes Correlated Equilibrium (search for similar items in EconPapers)
JEL-codes: D41 D42 D43 D83 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2020-05
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind, nep-mic and nep-ore
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