IDEAS home Printed from https://ideas.repec.org/p/ulp/sbbeta/2002-03.html
   My bibliography  Save this paper

Partial Certifiability and Information Precision in a Cournot Game

Author

Listed:
  • Frédéric KOESSLER

Abstract

This paper examines strategic information revelation in a Cournot duopoly with incomplete information about firm~1\'s cost and information precision. Firm~2 relies on certifiable and ex post submissions of firm~1, without necessarily knowing whether firm~1 knows its cost or not. The sequential equilibria of the induced communication game are determined for different certifiability possibilities. A perfectly cevealing equilibrium in which information precision is irrelevant is obtained under full certifiability. On the contrary, it is shown that if only payoff-relevant (fundamental) events can be certified, then the equilibrium output and profit of firm~1 decreases with its average information precision if this firm is uninformed or if its cost is high. A consequence of this local effect is that information precision has, on average, no value for a firm.

Suggested Citation

  • Frédéric KOESSLER, 2002. "Partial Certifiability and Information Precision in a Cournot Game," Working Papers of BETA 2002-03, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2002-03
    as

    Download full text from publisher

    File URL: http://beta.u-strasbg.fr/WP/2002/2002-03.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Masahiro Okuno-Fujiwara & Andrew Postlewaite & Kotaro Suzumura, 1990. "Strategic Information Revelation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 25-47.
    2. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    3. Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August.
    4. Gal-Or, Esther, 1985. "Information Sharing in Oligopoly," Econometrica, Econometric Society, vol. 53(2), pages 329-343, March.
    5. Glazer, Jacob & Rubinstein, Ariel, 2001. "Debates and Decisions: On a Rationale of Argumentation Rules," Games and Economic Behavior, Elsevier, vol. 36(2), pages 158-173, August.
    6. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
    7. Shin Hyun Song, 1994. "The Burden of Proof in a Game of Persuasion," Journal of Economic Theory, Elsevier, vol. 64(1), pages 253-264, October.
    8. Carl Shapiro, 1986. "Exchange of Cost Information in Oligopoly," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(3), pages 433-446.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bhattacharya, Sourav & Goltsman, Maria & Mukherjee, Arijit, 2018. "On the optimality of diverse expert panels in persuasion games," Games and Economic Behavior, Elsevier, vol. 107(C), pages 345-363.
    2. Forges, Francoise & Koessler, Frederic, 2005. "Communication equilibria with partially verifiable types," Journal of Mathematical Economics, Elsevier, vol. 41(7), pages 793-811, November.
    3. Frédéric KOESSLER, 2002. "Strategic Knowledge Sharing in Bayesian Games: A General Model," Working Papers of BETA 2002-01, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. Liang Guo & Ying Zhao, 2009. "Voluntary Quality Disclosure and Market Interaction," Marketing Science, INFORMS, vol. 28(3), pages 488-501, 05-06.
    5. Ben-Porath, Elchanan & Lipman, Barton L., 2012. "Implementation with partial provability," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1689-1724.
    6. Elchanan Ben-Porath & Barton L. Lipman, 2009. "Implementation and Partial Provability," Boston University - Department of Economics - Working Papers Series wp2009-002, Boston University - Department of Economics.
    7. Malueg, David A. & Tsutsui, Shunichi O., 1996. "Duopoly information exchange: The case of unknown slope," International Journal of Industrial Organization, Elsevier, vol. 14(1), pages 119-136.
    8. Koessler, Frederic, 2004. "Strategic knowledge sharing in Bayesian games," Games and Economic Behavior, Elsevier, vol. 48(2), pages 292-320, August.
    9. Goltsman, Maria & Pavlov, Gregory, 2014. "Communication in Cournot oligopoly," Journal of Economic Theory, Elsevier, vol. 153(C), pages 152-176.
    10. Thomas Lanzi & Jerome Mathis, 2008. "Consulting an Expert with Potentially Conflicting Preferences," Theory and Decision, Springer, vol. 65(3), pages 185-204, November.
    11. Elchanan Ben-Porath & Eddie Dekel & Barton L Lipman, 2018. "Disclosure and Choice," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(3), pages 1471-1501.
    12. Ackert, Lucy F. & Church, Bryan K. & Sankar, Mandira Roy, 2000. "Voluntary disclosure under imperfect competition: experimental evidence," International Journal of Industrial Organization, Elsevier, vol. 18(1), pages 81-105, January.
    13. Mathis, Jérôme, 2008. "Full revelation of information in Sender-Receiver games of persuasion," Journal of Economic Theory, Elsevier, vol. 143(1), pages 571-584, November.
    14. Clark, Derek J. & Sand, Jan Yngve, 2010. "Endogenous technology sharing in R&D intensive industries," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-48.
    15. Malueg, David A. & Tsutsui, Shunichi O., 1998. "Distributional assumptions in the theory of oligopoly information exchange1," International Journal of Industrial Organization, Elsevier, vol. 16(6), pages 785-797, November.
    16. Jackson, Matthew O. & Tan, Xu, 2013. "Deliberation, disclosure of information, and voting," Journal of Economic Theory, Elsevier, vol. 148(1), pages 2-30.
    17. Liang Guo, 2009. "The Benefits of Downstream Information Acquisition," Marketing Science, INFORMS, vol. 28(3), pages 457-471, 05-06.
    18. Yin, Xundong & Wang, Sophie Xuefei & Lu, Yuanzhu & Yan, Jianye, 2023. "Endogenous information acquisition and disclosure of private information in a duopoly," Economic Modelling, Elsevier, vol. 126(C).
    19. Midjord, Rune, 2012. "Competitive Pressure and Job Interview Lying: A Game Theoretical Analysis," DFAEII Working Papers 1988-088X, University of the Basque Country - Department of Foundations of Economic Analysis II.
    20. Thomas Lanzi & Jerome Mathis, 2011. "How to consult an expert? Opinion versus evidence," Theory and Decision, Springer, vol. 70(4), pages 447-474, April.

    More about this item

    Keywords

    Strategic information revelation; Information precision; Cournot competition; Cost uncertainty; Higher order uncertainty.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ulp:sbbeta:2002-03. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bestrfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.