Paper #155

Título:

Information acquisition and entry

Autores:

Sjaak Hurkens y Nir Vulkan

Data:

Febrero 1996

Resumen:

Before firms decide whether to enter a new market or not, they have the opportunity to buy information about several variables that might affect the profitability of this market. Our model differs from the existing literature on endogenous information acquisition in two respects: (1) there is uncertainty about more than one variable, and (2) information is acquired secretly. When the cost of acquiring information is small, entry decisions will be as if there was perfect information. Equilibria where each firm acquires only a small amount of information are more robust than the socially undesirable equilibria where all firms gather all information. Examples illustrate the importance of assumptions (1) and (2).

Área de investigación:

Microeconomía

Publicado en:

Journal of Economic Behavior and Organization 44(4): 467-479 (2001)

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