Learning about common and private values in oligopoly

Bernhardt, D. and Taub, B. (2015) Learning about common and private values in oligopoly. Rand Journal of Economics, 46(1), pp. 66-85. (doi: 10.1111/1756-2171.12077)

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We characterize a duopoly buffeted by demand and cost shocks. Firms learn about shocks from common observation, private observation, and noisy price signals. Firms internalize how outputs affect a rival's signal, and hence output. We distinguish how the nature of information —public versus private—and of what firms learn about—common versus private values—affect equilibrium outcomes. Firm outputs weigh private information about private values by more than common values. Thus, prices contain more information about private-value shocks.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Taub, Professor Bart
Authors: Bernhardt, D., and Taub, B.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Rand Journal of Economics
ISSN (Online):1756-2171
Published Online:28 January 2015
Copyright Holders:Copyright © 2015 RAND
First Published:First published in Rand Journal of Economics 46(1)66-85
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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