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ACQUISITION AND DISSEMINATION OF INFORMATION IN IMPERFECTLY COMPETITIVE MARKETS
Author(s) -
Andersen Torben M.,
Hviid Morten
Publication year - 1994
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1994.tb01346.x
Subject(s) - microeconomics , economics , stackelberg competition , market power , incentive , private information retrieval , set (abstract data type) , simple (philosophy) , perfect information , industrial organization , monopoly , computer science , philosophy , computer security , epistemology , programming language
In imperfectly competitive markets, incentives for the acquisition and dissemination of information by prices is significantly affected by strategic considerations. Since prices reveal information, firms possessing market power may choose to set prices which are either biased or not adjusted to all available information so as to distort their information content. Even when information is costlessly available strategic considerations may lead firms to remain uninformed. These results are illustrated in a simple Stackelberg model with price‐setting firms where the pricing game is preceded by an information acquisition game.