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SIMULTANEOUS PRICE CHANGES, INFORMATION ACQUISITION ON COMMON COMPETITORS AND WELFARE *
Author(s) -
KITAHARA MINORU,
MATSUMURA TOSHIHIRO
Publication year - 2008
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/j.1467-8454.2008.00356.x
Subject(s) - competitor analysis , complementarity (molecular biology) , welfare , economic surplus , microeconomics , business , economics , industrial organization , marketing , market economy , genetics , biology
We investigate a model where two firms choose whether to acquire information on a common competitor. We find that strategic complementarity on information acquisition exists, yielding multiple equilibria. In addition, we investigate welfare implication of information acquisition. We find that information acquisition reduces both consumer surplus and the total profits of the firms.