Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92604
Authors: 
Creane, Anthony
Miyagiwa, Kaz
Year of Publication: 
2007
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 705
Abstract: 
We relax the standard assumption in the strategic trade policy literature that governments possess complete information about the economy. Assuming instead that governments must obtain information from firms, we examine firms' incentive to disclose information to the governments in the Brander-Spencer setting. With quantity competition, we find firms disclosing both demand and cost information, thereby justifying the literature's omniscient-government assumption. With price competition, however, firms have no incentives to disclose demand or cost information, so governments remain uninformed. Further, with quantity competition and unknown demand, governments are caught in an informational prisoner's dilemma.
Subjects: 
information
uncertainty
learning
prisoner's dilemma
strategic trade
JEL: 
F12
F13
Document Type: 
Working Paper

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