Information, market power, and price volatility.
We consider demand function competition with a finite number of agents and private information. We show that any degree of market power can arise in the unique equilibrium under an information structure that is arbitrarily close to complete information. Regardless of the number of agents and the cor...
| Publicado en: | RAND Journal of Economics (Wiley-Blackwell) Vol. 52; no. 1; pp. 125 - 151 |
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| Autores principales: | , , |
| Formato: | Artículo |
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Wiley-Blackwell
Mar2021
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| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=149571842&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 149571842 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 07416261 56RJ jtl: RAND Journal of Economics (Wiley-Blackwell) issn: 07416261 maglogo: Y pubinfo: dt: Mar2021 vid: 52 iid: 1 pid: 480 pub: Wiley-Blackwell artinfo: ui: 149571842 10.1111/1756-2171.12364 ppf: 125 ppct: 26 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 787KB tig: atl: Information, market power, and price volatility. aug: au: Bergemann, Dirk Heumann, Tibor Morris, Stephen affil: Yale University Pontificia Universidad Católica de Chile MIT su: Market power Demand function sug: subj: Market power Demand function keyword: Cournot Competition Demand Function Competition Incomplete Information Market Power Price Impact Price Volatility Supply Function Competition Cournot Competition Demand Function Competition Incomplete Information Market Power Price Impact Price Volatility Supply Function Competition ab: We consider demand function competition with a finite number of agents and private information. We show that any degree of market power can arise in the unique equilibrium under an information structure that is arbitrarily close to complete information. Regardless of the number of agents and the correlation of payoff shocks, market power may be arbitrarily close to zero (the competitive outcome) or arbitrarily large (so there is no trade). By contrast, price volatility is always lower than the variance of the aggregate shock across all information structures. Alternative trading mechanisms lead to very distinct bounds as a comparison with Cournot competition establishes. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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