Agenda

12 Feb 2024 12:15

Nicolas Riquelme - Vertical contracting and information spillover in Cournot competition

Meeting Room 1, San Giobbe Economics Campus

Nicolas Riquelme (Universidad de los Andes, Chile)

Abstract: This paper revisits a standard model of Cournot competition with private (demand) information by introducing a common strategic input supplier. We characterize a unique equilibrium in which such information is endogenously flowed within a vertical chain by signaling and screening behaviors in vertical contracting. Under certain conditions, the equilibrium outcome coincides with the public information case, whereas otherwise, systemic quantity distortions arise for truthful information transmission. Compared to the competitive upstream market benchmark, the equilibrium in our model induces more dispersed equilibrium quantities and may generate higher consumer welfare at the cost of lowered vertical surplus.

 

 

 

Language

The event will be held in English

Organized by

Department of Economics (EcSeminars)

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