Information Acquisition in Cournot Games: A (Enhanced) two stage approach

• Autores: Eliane Catilina
• Localización: Abstracts of the Fifth Spanish Meeting on Game Theory and Applications / coord. por Jesús Mario Bilbao Arrese , Francisco Ramón Fernández García , 2002, ISBN 84-472-0733-1, pág. 49
• Idioma: inglés
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• Resumen

  • 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 p urchasing 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 i nformation 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. The paper also offers experimental evidences supporting the new approach to information acquisition.