Information Acquisition in Vertical Relations

Pio Baake, Harasser Andreas () and Heiny Friederike ()
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Harasser Andreas: DIW Berlin, Mohrenstr. 58, 10117Berlin, Germany
Heiny Friederike: DIW Berlin, Mohrenstr. 58, 10117Berlin, Germany

The B.E. Journal of Economic Analysis & Policy, 2017, vol. 17, issue 1, 13

Abstract: We analyse a simple supply chain with one supplier, one retailer and uncertainty about market demand. Focusing on the incentives of the supplier and the retailer to enhance their private information about the actual market conditions, we show that choices on information acquisition are strategic complements. While the retailer’s incentives are mainly driven by the information rent that he can earn, the supplier will choose to acquire information only if the retailer is rather well informed, even though the information is free of charge.

Keywords: asymmetric information; information acquisition; vertical relations (search for similar items in EconPapers)
JEL-codes: D82 D83 D86 (search for similar items in EconPapers)
Date: 2017
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Working Paper: Information Acquisition in Vertical Relations (2016)
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DOI: 10.1515/bejeap-2015-0211

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