Learning about common and private values in oligopoly

• Autores: Dan Bernhardt, Bart Taub
• Localización: The Rand Journal of Economics, ISSN-e 1756-2171, Vol. 46, Nº. 1, 2015, págs. 66-85
• Idioma: inglés
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• Resumen

  • We characterize a duopoly buffeted by demand and cost shocks. Firms learn about shocks from common observation, private observation, and noisy price signals. Firms internalize how outputs affect a rival's signal, and hence output. We distinguish how the nature of information �public versus private�and of what firms learn about�common versus private values�affect equilibrium outcomes. Firm outputs weigh private information about private values by more than common values. Thus, prices contain more information about private-value shocks.