Information Exchange in Retail Markets with Uncertainty about Downstream Costs

An information exchange between two producers selling independent prod- ucts to the same retailer can have ambiguous effects on market efficiency and surplus. When a retailer's costs are unobservable the producers may have an incentive to communicate about their negotiations with that retail...

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Xehetasun bibliografikoak
Argitaratua izan da:MAGKS - Joint Discussion Paper Series in Economics (Band 50-2017)
Egile nagusia: Herold, Daniel
Formatua: Artikulua
Hizkuntza:ingelesa
Argitaratua: Philipps-Universität Marburg 2017
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Deskribapena
Gaia:An information exchange between two producers selling independent prod- ucts to the same retailer can have ambiguous effects on market efficiency and surplus. When a retailer's costs are unobservable the producers may have an incentive to communicate about their negotiations with that retailer. If each producer is allowed to place one offer the producers will have no incen- tive to exchange information. However, the retailer may communicate that he refused the first offer to the other firm which subsequently might place a lower offer. When one firm is allowed to place a second offer, two equilibria involve communication between the producers. In a separating equilibrium an information exchange ensures that agreement will always be found. In a hybrid equilibrium, the likelihood that agreement is found is less likely.
Deskribapen fisikoa:31 Seiten
ISSN:1867-3678
DOI:10.17192/es2024.0468