Communication in Cournot oligopoly

A-Tier
Journal: Journal of Economic Theory
Year: 2014
Volume: 153
Issue: C
Pages: 152-176

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper studies communication in a static Cournot duopoly model under the assumption that the firms have unverifiable private information about their costs. We investigate the conditions under which the firms cannot transmit any information through cheap talk, and show that when these conditions are violated, it may be possible to construct informative cheap-talk equilibria. If the firms can communicate through a third party, communication can be informative even when informative cheap talk is impossible. We exhibit a simple mediated mechanism that ensures informative communication and interim Pareto dominates the uninformative equilibrium for the firms.

Technical Details

RePEc Handle
repec:eee:jetheo:v:153:y:2014:i:c:p:152-176
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25