Arbeitspapier
On the Welfare Effects of Adverse Selection in Oligopolistic Markets
We consider a principal-agent relationship with adverse selection. Principals pay informational rents due to asymmetric information and sell their output in a homogeneous Cournot-oligopoly. We find that asymmetric information may mitigate or more than compensate the welfare reducing impact of market power, irrespective of whether the number of firms is given exogenously or determined endogenously by a profit constraint. We further show that welfare in a setting with adverse selection may be higher than the maximized welfare level attainable in a world with perfect observability.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 10003
- Classification
-
Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Asymmetric and Private Information; Mechanism Design
Economics of Regulation
- Subject
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adverse selection
oligopoly
welfare
- Event
-
Geistige Schöpfung
- (who)
-
de Pinto, Marco
Goerke, Laszlo
Palermo, Alberto
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
-
2022
- Handle
- Last update
- 10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- de Pinto, Marco
- Goerke, Laszlo
- Palermo, Alberto
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2022
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On the welfare effects of adverse selection in oligopolistic markets
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Welfare-enhancing trade unions in an oligopoly with excessive entry
Welfare-enhancing trade unions in an oligopoly with excessive entry
Welfare-enhancing Trade Unions in an Oligopoly with Excessive Entry
Corporate Social Responsibility and Tax Avoidance
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Tax Progressivity and Tax Evasion
Partisan competition authorities, Cournot‐oligopoly, and endogenous market structure
Sick Pay Reforms and Health Status in a Unionised Labour Market
Redundancy Pay and Collective Dismissals