Endogenous Price Leadership and the Strategic Acquisition of Information
Scott M. Gilpatric and
Youping Li ()
Additional contact information
Scott M. Gilpatric: Department of Economics and Corporate Governance Center, 527C Stokely Management Center, University of Tennessee, Knoxville, TN 37996, USA
Southern Economic Journal, 2016, vol. 82, issue 3, 859-873
We model a differentiated Bertrand duopoly in which a firm's earlier knowledge of market demand than its competitor results in endogenous price leadership with the information advantaged firm leading. In such a setting with second-mover advantage, we then study the firmsâ€™ incentives to acquire information and analyze an information acquisition game. Both (i) neither firm acquiring information and (ii) one firm acquiring information can arise as subgame perfect equilibrium, but both firms acquiring information is never an equilibrium outcome, even if information is free. Information may have a negative value if it causes a change in the timing of price competition.
JEL-codes: L1 D8 (search for similar items in EconPapers)
References: Add references at CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:sej:ancoec:v:82:3:y:2016:p:859-873
Access Statistics for this article
Southern Economic Journal is currently edited by Laura Razzolini
More articles in Southern Economic Journal from Southern Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Laura Razzolini ().