Partial Certifiability and Information Precision in a Cournot Game

Frederic Koessler

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: This paper examines strategic information revelation in a Cournot duopoly with incomplete information about firm~1\'s cost and information precision. Firm~2 relies on certifiable and ex post submissions of firm~1, without necessarily knowing whether firm~1 knows its cost or not. The sequential equilibria of the induced communication game are determined for different certifiability possibilities. A perfectly cevealing equilibrium in which information precision is irrelevant is obtained under full certifiability. On the contrary, it is shown that if only payoff-relevant (fundamental) events can be certified, then the equilibrium output and profit of firm~1 decreases with its average information precision if this firm is uninformed or if its cost is high. A consequence of this local effect is that information precision has, on average, no value for a firm.

Keywords: Strategic information revelation; Information precision; Cournot competition; Cost uncertainty; Higher order uncertainty. (search for similar items in EconPapers)
JEL-codes: C72 D43 D82 L13 (search for similar items in EconPapers)
Date: 2002
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://beta.u-strasbg.fr/WP/2002/2002-03.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2002-03

Access Statistics for this paper

More papers in Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).