Information Acquisition in Cournot Markets: An (enhanced) two- Stage Approach

Eliane Catilina

Game Theory and Information from University Library of Munich, Germany

Abstract: This paper presents an alternative or enhanced approach to information acquisition in Cournot markets with stochastic demand in which the cost of information acquisition is endogenously determined by firms' information purchasing strategy. I propose a two-stage model in which in the first stage each firm decides whether it will join a coalition to purchase information and therefore share the cost of information acquisition, to individually purchase information, or to remain uninformed. In the second-stage firms engage in Cournot competition to choose output. The model I propose encompasses the main assumptions of the current view on information acquisition, mainly those related to the role of information and how it affects firms' profits. However, I will argue that by adding natural assumptions on oligopolists' behavior, I can offer a model that provides a better description of firms' actions and trade-offs than the standard view. Keywords: Information Acquisition, Cournot Markets, Subgame Perfect Nash equilibrium, Strong Nash Equilibrium.

Keywords: Information Acquistion; Cournot Market; Strong Nash Equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D43 D83 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2002-03-05
New Economics Papers: this item is included in nep-gth and nep-mic
Note: Type of Document - pdf; pages: 43
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:0205005

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