Communication in Cournot oligopoly

Maria Goltsman and Gregory Pavlov ()

Journal of Economic Theory, 2014, vol. 153, issue C, 152-176

Abstract: This paper studies communication in a static Cournot duopoly model under the assumption that the firms have unverifiable private information about their costs. We investigate the conditions under which the firms cannot transmit any information through cheap talk, and show that when these conditions are violated, it may be possible to construct informative cheap-talk equilibria. If the firms can communicate through a third party, communication can be informative even when informative cheap talk is impossible. We exhibit a simple mediated mechanism that ensures informative communication and interim Pareto dominates the uninformative equilibrium for the firms.

Keywords: Cournot oligopoly; Communication; Information; Cheap talk; Mediation (search for similar items in EconPapers)
JEL-codes: C72 D21 D43 D82 D83 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:153:y:2014:i:c:p:152-176

DOI: 10.1016/j.jet.2014.06.008

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