Tuesday, December 3, 2013
Fabio Tramontana (Department of Economics and Management, University of Pavia) discusses Information exchange in a Cournot duopoly with nonlinear demand function.
ABSTRACT: We study information sharing in a Cournot duopoly with isoelastic demand function, when the elasticity is uncertain. This is one of the first attempts to analyze the role of nonlinearity in such a framework. We found important results about the profitability of sharing informations when marginal costs are high and/or the variance between elasticity values is low. From the point of view of welfare considerations, not sharing information seems to be the best scenario.