 Cooperation in a differentiated duopoly when information is dispersed: A beauty contest game with endogenous concern for coordinationCamille Cornand and Rodolphe Dos Santos Ferreira No 1501, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon Abstract: The paper provides a micro-founded differentiated duopoly illustration of a beauty contest, in which the relative weight put on the competition motive of the payoffs is not exogenous but may be manipulated by the players. The conflict between the competition and the fundamental motives, already present in an oligopolistic setting under perfect information, is exacerbated when information is imperfect and dispersed. A conflict arises also in this case between the competition and the coordination motive, ending up in the undervalueing of public information. We show, in the context of a delegation game, how firm owners ease these conflicts by opting for some cooperation, thus moderating the competitive toughness displayed by their managers. By doing so, they also enhance the managers’ concern for coordination and consequently heighten the weight put on public relative to private information. Keywords: beauty contest; competition; cooperation; coordination; delegation game; differentiated duopoly; dispersed information (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:1501 Access Statistics for this paper More papers in Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon Contact information at EDIRC. |
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