Communication in Cournot Oligopoly
Maria Goltsman*, Gregory Pavlov
Date: 2012-05-04 5:30 pm – 6:00 pm
Last modified: 2012-04-22
Abstract
We study communication in a static oligopoly model with unverifiable private information.
Contrary to the previous literature, we show that communication between firms in the static setting can be informative even when it is not substantiated by any
commitment or costly actions. We exhibit a simple mechanism that ensures informative
communication and show that any informative communication equilibrium interim
Pareto dominates the uninformative equilibrium for the firms.