Paper #386

Title:

Endogenous information structures

Authors:

Sjaak Hurkens and Nir Vulkan

Date:

April 1999

Abstract:

Many models in the economics literature deal with strategic situations with privately informed agents. In those models the information structure is assumed to be exogenous and common knowledge. We consider whether such models, and the results they produce, are robust with respect the endogenization of the information structure. The results depend on whether information acquisition is secret or private, and on whether the strategic situation involves simultaneous or sequential moves. In particular we find that only when information is secretly acquired and moves are simultaneous, the results are fully robust. When information is acquired secretly but moves are sequential additional equilibria may appear. Instead, private information acquisition may make the equilibrium set smaller.

Keywords:

Information acquisition, private information, equilibrium

JEL codes:

C72, D82, D83

Area of Research:

Microeconomics

Published in:

European Economic Review, 50(2006), 1, pp. 35-54

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