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University of Tübingen Working Papers in Economics and Finance >
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http://hdl.handle.net/10419/48628
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| Title: | | Exchange of private demand information by simultaneous signaling  |
| Authors: | | Stadler, Manfred |
| Issue Date: | | 2011 |
| Series/Report no.: | | University of Tübingen working papers in economics and finance 17 |
| Abstract: | | As is well-known from the literature on oligopolistic competition with incomplete information, firms have an incentive to share private demand information. However, by assuming verifiability of demand data, these models ignore the possibility of strategic misinformation. We show that if firms can send misleading demand information, they will do so. Furthermore, we derive a costly signaling mechanism implementing demand revelation, even without verifiability. For the case of a gamma distribution of the firms' demand variables, we prove that the expected gross gains from information revelation exceed the expected cost of signaling if the skewness of the distribution is sufficiently large and the products are sufficiently differentiated. |
| Subjects: | | Information sharing simultaneous signaling demand uncertainty |
| JEL: | | C73 D82 L13 |
| Persistent Identifier of the first edition: | | urn:nbn:de:bsz:21-opus-57395 |
| Document Type: | | Working Paper |
| Appears in Collections: | | University of Tübingen Working Papers in Economics and Finance
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