Affordable Access

Publisher Website

Optimal research for cournot oligopolists

Authors
Journal
Journal of Economic Theory
0022-0531
Publisher
Elsevier
Publication Date
Volume
42
Issue
1
Identifiers
DOI: 10.1016/0022-0531(87)90107-4

Abstract

Abstract An oligopolistic industry faces uncertain demand. Firms can conduct research prior to production, obtaining private data that is informative of the unknown parameters of demand. Firm strategies thus consist of a level of research and a subsequent production strategy based on their research findings. We characterize the Bayes equilibrium of such a model when demand is linear, with unknown intercept, and the information structure has linear conditional expectations. We compare the solution to an efficiency standard, finding inefficiencies even in the competitive limit.

There are no comments yet on this publication. Be the first to share your thoughts.