The social value of information and the competition motive: price versus quantity games

Camille Cornand*, Rodolphe dos Santos Ferreira

*Autor correspondente para este trabalho

Resultado de pesquisarevisão de pares

4 Citações (Scopus)


We propose a unified framework bridging the gap between team and competition issues in price and quantity games, played by producers of either substitutes or complements, when information is imperfect and dispersed. We reconsider the social value of private and public information in this context and compare the outcomes of the two types of games in terms of equilibrium and social welfare. By parting with full cooperation, the competition motive fitted into the payoffs introduces a strategy distortion and, when information is dispersed, an informational distortion, both increasing with the intensity of competition. The former affects the response to the expected value of the fundamental, and the latter translates into an inefficiently low (high) weight on public information under strategic complementarity (substitutability). Contrary to the latter, which vanishes in the absence of the competition motive, the former is eliminated, under strategic complementarity and dispersed information, at some positive strength of the competition motive, decreasing with the information quality. This disparity creates a trade-off between the minimization of each distortion. As to the social value of public information, it is always positive, while that of private information may be negative, again under strategic complementarity, if competition is intense and the quality of private information relatively poor. Finally, it is more profitable to play under strategic substitutability, except possibly for an intermediate range of the intensity of competition if the quality of private information is again relatively poor.
Idioma originalEnglish
Páginas (de-até)1101–1137
Número de páginas37
RevistaEconomic Theory
Número de emissão4
Estado da publicaçãoPublished - 1 nov 2020

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