Secret information acquisition in Cournot markets

Abstract

Two-stage game models of information acquisition in stochastic oligopolies require the unrealistic assumption that rms observe the precision of information chosen by their competitors before determining quantities. This paper analyzes secret information acquisition as a one-stage game. Relative to the two-stage game rms are shown to acquire less information. Policy implications based on the two-stage game yield, therefore, too high taxes or too low subsidies for research activities. For the case of heterogeneous duopoly it is shown that comparative statics results partly depend on the observability assumption. Journal of Economic Literature Classi cation Numbers: C72, D43, D82.

Cognitive Empathy in Conflict Situations

“…Li et al (1987), Hwang (1993), Hauk and Hurkens (2001), Dimitrova and Schlee (2003), and Jansen (2008), where firms can acquire information about the uncertain market demand before engaging in oligopoly competition. Market demand enters all agents' profit functions, whereas in our model the information a player might acquire is exclusively about the opponent's preferences.…”

How Risk Disciplines Pre-Commitment

“…22 In fact, the value of information can be seen as the sum of two components: the informational value and the strategic value of information (Hauk and Hurkens, 2001). In our model, the strategic value, that is, "the indirect gain caused by the reaction of agents to the private information", is always positive.…”

Do people make strategic commitments? Experimental evidence on strategic information avoidance

“…Many important interactive economic situations involve decisions about how much information to collect. Some examples are negotiators engaging in fact finding missions before sitting down at the negotiating table, and bidders going to viewing days to get a feel for the value of the items on sale (see Hauk andHurkens 2001, andVulkan 2006). It is useful when considering such situations to know the extent to which players make the theoretically predicted strategic commitment since deviations from the prediction could have sizeable economic implications for the players.…”

“…1 Well-known examples of strategic commitments are moving before someone else to get a first-mover advantage (Bagwell 1995;Müller 2000, andSchelling 1960); signing contracts with third-parties (Aghion andBolton 1987, andBensaid andGary-Bobo 1993); burning money (Ben-Porath and Dekel 1992;Van Damme 1989;Huck and Müller 2005); strategic delegation (Fershtman and Gneezy 2001;Kalai 1997, andSchelling 1960); changing the information structure (Hauk and Hurkens 2001;Vulkan 2006, andSchelling 1960) or controlling the flow of information (Brocas and Carrillo 2007).…”