information transmission cournot and bertrand equilibria we examine how incentives for two duopolists to honestly share information change depending upon the nature of competition cournot or bertrand and the nature of the information structure while in earlier papers uncertainty is about an unknown common demand intercept in the present paper uncertainty is about unknown private costs the different information structure reverses the incentives to share information while with unknown common demand sharing is a dominant strategy with bertrand competition and concealing is a dominant strategy with cournot competition with unknown private costs sharing is a dominant strategy with cournot competition and concealing is a dominant strategy with bertrand competition

strategic information disclosure the case of multi attribute products with heterogeneous consumers we examine the incentives for firms to voluntarily disclose otherwise private information about quality attributes of differentiated products in particular we focus on the case of differentiated products with multiple attributes and consumers that are heterogeneous in their preferences over these attributes we show that there exist certain configurations of consumer preferences under which a firm producing a high quality product even with zero costs of disclosure may choose not to reveal the quality of its product this failure of firms to voluntarily disclose the quality of their products will arise when providing consumers with more information results in more elastic demands for these products which in turn triggers more intensive price competition and leads to lower prices and profits for all firms as a result the equilibrium in which disclosure is voluntary may diverge from that in which disclosure is mandatory

labor market rigidities and informality in colombia informality is at the center of the economic debate in colombia fueled by the high level prevalent in the country and its substantial increase during the 1990s we study the effect of labor market rigidities namely the increase in non wage costs and the minimum wage on the size of the informal sector the transition into and out of informality and wages our results indicate that rises in non wage costs and the minimum wage increase the probability of transition into informality as well as the size of the informal sector the business cycle has second order effects the analysis across education groups points towards strong exclusion motives for low skilled informal workers mainly driven by labor demand adjustments in response to increasing hiring costs and argues somehow in favor of exit motives for workers with higher educational attainment in addition we document facts regarding the evolution and characteristics of the informal sector across alternative definitions of informality

information revelation in auctions with common and private values we explore the incentives to reveal verifiable private information when there are both common and private components to agents valuations and when private information is held in both dimensions when agents observe only one signal they have no incentive to reveal the signal because such a revelation would negate their information advantage however when agents observe multiple signals they may be incentivized to reveal certain signals that could lower their opponents bids and thereby result in a higher profit from other signals this paper shows that there exists an equilibrium with revelation of common value signals in standard auctions which is an efficient equilibrium that maximizes the social welfare and could provide the seller with a higher profit than a situation with no information revelation

communication in cournot oligopoly abstract this paper studies communication in a static cournot duopoly model under the assumption that the firms have unverifiable private information about their costs we investigate the conditions under which the firms cannot transmit any information through cheap talk and show that when these conditions are violated it may be possible to construct informative cheap talk equilibria if the firms can communicate through a third party communication can be informative even when informative cheap talk is impossible we exhibit a simple mediated mechanism that ensures informative communication and interim pareto dominates the uninformative equilibrium for the firms

the effect of strategic alliances on firm productivity in south korea using a rich firm level data set from south korea this article analyses the impact of strategic alliances on firm performance focusing on how firm productivity is affected by alliance types such as joint venture joint technical development technical alliance joint marketing and coproduction as well as alliance structures such as intra and inter industry alliances total factor productivity tfp is estimated through the semi parametric method suggested by levinsohn and petrin 2003 in addition a two stage least squares 2sls method is applied to reduce the potential endogenous problem between productivity and strategic alliance choices the empirical results found in this article indicate that the engagement in joint ventures positively affects firm productivity and that the formation of international intra industry alliances has a positive impact on firm productivity

impacts of new entry and horizontal joint ventures on industrial rates of return data resources inc regional load curve models vols 1 and 3 aug sept 1981 engle robert clive w j granger allen mitchem and ramu ramanathan some problems in the estimation of daily load shapes and peaks modelling and analysis ofelectricity demand by time of day electric power research institute epri ea 1304 dec 1979 engle robert f clive w j granger and ramu ramanathan regional load curs e models querj s model long run forecasts and sensitidvity analysis epri ea 1672 vol 4 sept 1981 granger clive w j robert f engle ramu ramanathan and allan andersen residential load curves and time of day pricing an econometric analysis journal ofeconometrics 9 1979 13 32 granger clive w j et al a regional load curve model specification and estimation electric power research institute forthcoming graybill franklin theory and application of the linear model north scituate ma duxbury press 1976 hanushek eric a efficient estimators for regressing regression coefficients the american statistician 28 may 1974 66 67 mitchem allen a regional model of time of day elasticity demand a tiuo stage approach unpublished phd dissertation university of california at san diego 1981 poirier dale economic issues in land forecasting modelling and analysis of electricity demand by time oj day epri ea 1304 dec 1979 ramanathan ramu robert f engle and clive w j granger regional load curlve models querj s model long run forecasts and sensitivity analysis epri ea 1672 vol 2 aug 1981 university of arizona engineering experiment station modelling and analysis of electricity demand by time of day epri ea 1304 dec 1979 proceedings of the epri workshop at san diego u s department of commerce notes on temperaturehumidity index l s 5922 june 1959

exchange of cost information in oligopoly when do oligopolists gain by sharing their private information about their costs with one another what are the social welfare effects of such information exchange i study these questions by comparing the oligopolists expected profits under a cost sharing agreement with their expected profits in the bayesian equilibrium that would arise without cost sharing i also analyse the firms decisions to form a trade association to share their cost data under conditions of linear demand and cournot behaviour industrywide information exchange is the unique point in the core of the trade association membership game the exchange of cost data increases expected profits and welfare but reduces expected consumer surplus cost sharing increases efficiency by raising the market shares of lower cost firms and reducing the variability of aggregate output consumer surplus is diminished however because the variance of output is reduced and consumer surplus is a convex function of output

strategic information revelation we analyze the problem in which agents have non public information and are to play an asymmetric information game the agents may reveal some or all of their information to other agents prior to playing this game revelation is via exogenously specified certifiable statements the equilibria resulting from various revelation strategies are used to determine equilibrium revelation of information sufficient conditions are provided for complete revelation of all private information a number of examples are provided illustrating when revelation will or will not occur in commonly analyzed games many economic problems are characterized by the presence of both strategic behaviour on the part of individuals and by asymmetric information models encompassing both of these characteristics have been used successfully to examine questions in many fields usually using the concept of bayesian nash equilibrium as the solution concept typically the agents information is given exogenously and is fixed throughout the analysis modelling the information structure as static is appropriate for some problems but not for all in particular situations that are inherently dynamic most economic encounters allow for some interchange between the agents before the outcome is settled irrevocably in such circumstances it is possible that at least one or more of the agents possessing non public information may be able to reveal part or all of his information to one or all of the other agents in the economy during the course of their contact to the extent that such a communication is believed by the other agents the priors of the other agents will change and we will have what is in essence a new asymmetric information game new in

the strategic alliance of the biotechnology firm this article applies the relevant theories of firm organization and inter firm relationships in the high tech environment to explain the institutional reasons that firms choose between internal or external approaches particularly this study tries to understand to what extent and in what way strategic alliances have impacts on individual firms organizational structure financial structure and firms activities also it tries to find out what type of firms tend to benefit most from alliances and thus use more inter firm agreements the theoretical findings are that due to liquidity constraint and asymmetric information reasons young research intensive firms need to use more alliances to survive in the fast changing high technology industry the empirical analysis employs 3 year panel data and finds that the results are consistent with the theoretical predictions

a model of efficient discovery abstract we construct a model of costly pretrial discovery represented as learning the drift rate of a diffusion process by observing its path and settlement negotiations analyzed as a mechanism design problem in which the gains from settling are the avoided costs of a trial whose outcome is correlated with their private information we show that for this particular model the parties expected gains from a joint plan of discovery preceding the settlement negotiations are unaffected by their privately known parameters hence there is no intrinsic impediment to initial agreement on an efficient plan of discovery journal of economic literatureclassification nos c78 d74 d82 k41

impacts of domestic joint ventures on industrial rates of return a pooled cross section analysis 1964 1975 empirical evidence on the relations among diversification concentration and profitability is inconclusive on whether any relation exists in this note changes in diversification and concentration in u s manufacturing industries are examined over the period 1963 72 when a major expansion in diversification took place the zero order correlations between changes in concentration and in diversification either out of or into an industry tend to be positive and significant the relation becomes insignificant when other variables especially market growth are controlled however a positive relation between changes in concentration and inbound diversification does remain significant among the less concentrated industries where it seems more likely to reflect real economies enjoyed by diversifying companies than the exercise of market power

unraveling in first price auction abstract in a private values first price auction with random number of bidders the auctioneer has to decide whether to announce or not the actual number of bidders if the auctioneer cannot commit to any particular announcement policy then he would like to reveal when the number of bidders is high in order to increase bidding competition by the same logic the auctioneer should like to conceal if the number turns out to be small when bidders types are independent full revelation by the auctioneer is shown to be a unique equilibrium with skeptical belief as the unique equilibrium belief

duopoly information equilibrium cournot and bertrand abstract in a duopoly model where firms have private information about an uncertain linear demand it is shown that if the goods are substitutes not to share information is a dominant strategy for each firm in bertrand cournot competition if the goods are complements the result is reversed furthermore the following welfare results are obtained 1 i with substitutes in cournot competition the market outcome is never optimal with respect to information sharing but it may be optimal in bertrand competition if the products are good substitutes with complements the market outcome is always optimal 2 ii bertrand competition is more efficient than cournot competition 3 iii the private value of information to the firms is always positive but the social value of information is positive in cournot and negative in bertrand competition

uncertainty resolution private information aggregation and the cournot competitive limit a cournot model of oligopoly in which otherwise identical firms have private differential information about the common cost of production and a shared but unknown demand curve is examined a bayesian equilibrium of the corresponding game of incomplete information is solved for explicitly and analysed in the symmetric equilibrium different firms produce at different output levels because they have different information because the information individual firms have is random total output and hence market price is also random for any finite number of firms the main result of the paper relates to the asymptotic properties of the equilibrium when the number of firms becomes large under fairly general conditions on the joint distribution of demand and individual firms information about demand the random equilibrium price converges almost surely to a constant in the limit more importantly this price equals the perfectly competitive price in other words in large markets even if no firm knows the true market demand curve and firms are not price takers and do not use price as a signal to improve their information the competitive price will prevail with certainty in the limit aggregate outcomes are as if all firms shared their private information with each other

the transaction costs theory of joint ventures an empirical study of japanese subsidiaries in the united states this paper offers the first large sample empirical study of the factors which influence the choice of japanese firms between full or partial ownership of their u s manufacturing subsidiaries it studies for the first time the ownership policies of investors of a single home country in a single host country thus keeping variations within home and host countries constant one methodological improvement over previous studies is the use as independent variables of the relevant characteristics of the investing firms these had been proxied in previous studies by data on u s industries entered the results suggest that the degree of ownership taken by japanese manufacturing investors in their american subsidiaries is driven by the same general transaction costs variables that determine the choices made by their u s counterparts japanese parents joint venture when they need to combine with other firms intermediate inputs which are subject to high market transaction costs an intriguing result however is the lack of significance of two variables which in the u s case strongly push towards full control of foreign subsidiaries in this study neither the japanese parent s r d nor its advertising intensities had any significant impact on their ownership policies

quality disclosure formats in a distribution channel firms normally disclose quality information to consumers using two alternative formats either directly to consumers or indirectly through downstream retailers this study investigates optimal disclosure strategies formats in a channel setting with bilateral monopolies it shows that retail disclosure leads to more equilibrium information revelation this is because the manufacturer can through wholesale price cuts partially absorb the retailer s effective disclosure cost and thus increase the retailer s incentive for disclosure the conditions under which a particular disclosure format arises as the manufacturer s optimal choice are also examined even though direct disclosure is the ex post dominated option the manufacturer may benefit from committing ex ante to the direct disclosure format when the cost of disclosure is sufficiently high

conflicts of interest information provision and competition in the financial services industry abstract in some markets sellers have better information than buyers over which products best serve a buyer s needs depending on the market structure this may lead to conflicts of interest in the provision of information by sellers this paper studies this issue in the market for financial services the analysis presents a new model of competition between banks where price competition influences the ensuing incentives for truthful information revelation we also compare conflicts of interest in two different firm structures specialized banking and one stop banking

disclosures and asset returns public information in financial markets often arrives through the disclosures of interested parties who have a material interest in the reactions of the market to the new information when the strategic interaction between the sender and the receiver is formalized as a disclosure game with verifiable reports equilibrium prices can be given a simple characterization in terms of the concatenation of binomial pricing trees there are a number of empirical implications the theory predicts that the return variance following a poor disclosed outcome is higher than it would have been if the disclosed outcome were good also when investors are risk averse this leads to negative serial correlation of asset returns other points of contact with the empirical literature are discussed

voluntary disclosure and investment in environmental technology abstract i examine the role of voluntary disclosure programs in creating market incentives for competing firms to invest in environmentally cleaner technology in an industry subject to environmental regulation such as emission taxes such programs may allow firms to credibly disclose their progress in achieving compliance cost reduction through investments in internal rd the outcome of the investment is private information i show that the ex ante incentive to invest is always higher in the presence of the voluntary disclosure program than without it in particular the opportunity to credibly disclose progress in cost reduction allows a successful firm to convey its true position of competitive advantage to the rival firm and realize higher market share and profit thus voluntary disclosure programs increase the efficacy of traditional forms of environmental regulation in creating incentives for green technological change even when buyers have no preference for greener technology i show that such programs generally increase social welfare

relying on the information of interested parties we investigate the conventional wisdom that competition among interested parties attempting to influence a decisionmaker by providing verifiable information elicits all relevant information we find that if the decisionmaker is strategically sophisticated and well informed about the relevant variables and about the preferences of the interested party or parties competition may be unnecessary to achieve this result if the decisionmaker is unsophisticated or not well informed competition is not generally sufficient if the interested parties interests are sufficiently opposed however or if the decisionmaker is seeking to advance the parties welfare then competition can reduce or even eliminate the decisionmaker s need for prior knowledge about the relevant variables and for strategic sophistication in other settings only the combination of competition among information providers and a sophisticated skepticism is sufficient to allow effective decisionmaking