The social value of information and the competition motive: Price vs. quantity games

Camille Cornand and Rodolphe Dos Santos Ferreira

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Abstract: We propose a unified framework bridging the gap between team and competition issues, in order to reconsider the social value of private and public information in price and quantity games under imperfect and dispersed information, and to compare the corresponding outcomes in terms of equilibrium and social welfare. The informational distortion associated with the competition motive may lead to a negative social value of private information and reverse the perfect information result in favor of strategic substitutability as the source of higher profit and social welfare. Abstract We propose a unified framework bridging the gap between team and competition issues, in order to reconsider the social value of private and public information in price and quantity games under imperfect and dispersed information, and to compare the corresponding outcomes in terms of equilibrium and social welfare. The informational distortion associated with the competition motive may lead to a negative social value of private information and reverse the perfect information result in favor of strategic substitutability as the source of higher profit and social welfare.

Keywords: beauty contest; competition; coordination; strategic complementarity; anti-coordination; strategic substitutability; quantity game; dispersed information; public information (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-gth and nep-mic
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Working Paper: The social value of information and the competition motive: Price vs. quantity games (2017)
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