Private information, risk aversion, and the evolution of market research

Sandra Güth, Werner Güth () and Wieland Müller

No 2000,113, SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes

Abstract: On a homogeneous oligopoly market informed sellers are fully aware of market demand whereas uninformed sellers only know the distribution. We first derive the market results when sellers are risk averse, similarly to Ponssard (1979) who assumed risk neutrality throughout. With the help of these results evolutionary processes are formulated according to which sellers can switch to market research or refrain from it depending on the difference in profits of informed and uninformed sellers. We derive the evolutionarily stable number of informed sellers and discuss how it is influenced by market parameters.

Keywords: evolution; oligopoly; market research; private information (search for similar items in EconPapers)
JEL-codes: C72 D43 D82 (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:sfb373:2000113

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