Insisting on a non-negative price: oligopoly, uncertainty, welfare, and multiple equilibria

Abstract: "I study Cournot competition under incomplete information about demand while assuming that market price must be non-negative for all demand realizations. Although this assumption is very natural, it has only rarely been made in the earlier literature. Yet it has important economic consequences: (1) multiple (symmetric, pure strategy) equilibria can exist, despite the fact that demand and cost are linear; and (2) expected total surplus can be larger when the firms do not know demand than when they do, a result which has important implications for the social desirability of information sharing. The arguments of the paper are relevant also for price competition and for uncertainty about, e.g., cost or the number of firms, and these issues are discussed." (author's abstract)

Object Details

• Alternative title: Bestehen auf einen nichtnegativen Preis: Oligopol, Ungewißheit, Wohlfahrt und multiple Gleichgewichte
• Location: Deutsche Nationalbibliothek Frankfurt am Main
• Extent: Online-Ressource, 26 S.
• Language: Englisch
• Notes: Veröffentlichungsversion

References and Relationships

• Bibliographic citation: Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und politische Ökonomie, Abteilung Wettbewerbsfähigkeit und industrieller Wandel ; Bd. 2003-04

Classification and Topics

• Keyword: Unvollkommene Information ; Dynamisches Gleichgewicht ; Theorie

Contributors, Places and Time

• Event: Veröffentlichung
• (where): Berlin
• (when): 2003
• Creator: Lagerlöf, Johan
• Contributor: Wissenschaftszentrum Berlin für Sozialforschung gGmbH

Further information

• URN: urn:nbn:de:0168-ssoar-111393
• Rights: Open Access unbekannt; Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
• Last update: 25.03.2025, 1:43 PM CET