Communication in Cournot oligopoly

Arbeitspapier

We study communication in a static Cournot duopoly model under the assumption that the firms have unverifiable private information about their costs. We show that cheap talk between the firms cannot transmit any information. However, if the firms can communicate through a third party, communication can be informative even when it is not substantiated by any commitment or costly actions. We exhibit a simple mechanism that ensures informative communication and interim Pareto dominates the uninformative equilibrium for the firms.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Research Report ; No. 2012-1

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Firm Behavior: Theory ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Asymmetric and Private Information; Mechanism Design ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Subject: Cournot oligopoly ; communication ; information ; cheap talk ; mediation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Goltsman, Maria ; Pavlov, Gregory
• Event: Veröffentlichung
• (who): The University of Western Ontario, Department of Economics
• (where): London (Ontario)
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/70395
• Last update: 10.03.2025, 11:47 AM CET