The social value of information and the competition motive: Price vs. quantity games

Camille Cornand (1) , Rodolphe dos Santos Ferreira (2)

1 GATE - Groupe d'analyse et de théorie économique
2 BETA - Bureau d'Économie Théorique et Appliquée

We propose a unified framework bridging the gap between team and competition issues, in order to reconsider the social value of private and public information in price and quantity games under imperfect and dispersed information, and to compare the corresponding outcomes in terms of equilibrium and social welfare. The informational distortion associated with the competition motive may lead to a negative social value of private information and reverse the perfect information result in favor of strategic substitutability as the source of higher profit and social welfare. Abstract We propose a unified framework bridging the gap between team and competition issues, in order to reconsider the social value of private and public information in price and quantity games under imperfect and dispersed information, and to compare the corresponding outcomes in terms of equilibrium and social welfare. The informational distortion associated with the competition motive may lead to a negative social value of private information and reverse the perfect information result in favor of strategic substitutability as the source of higher profit and social welfare.

Mots clés: beauty contest; competition; coordination; strategic complementarity; anti-coordination; strategic substitutability; quantity game; dispersed information; public information

Domaines: Economies et finances

Camille Cornand, Rodolphe dos Santos Ferreira. The social value of information and the competition motive: Price vs. quantity games . 2017. ⟨halshs-01614815v2⟩