Information Use and Social Welfare in a Duopoly with Anti-Coordination
(2018) NEKN01 20181Department of Economics
- Abstract (Swedish)
- The aim of this thesis is to investigate information use, equilibrium behavior and social welfare in a duopoly market with anti-coordination. The analysis is conducted through the application of a game theoretic model first introduced in a 2002 seminal paper by Morris and Shin, to the Los Angeles stringer industry. In this setting, freelance journalists selling footage to news networks have a motive to match some fundamental state of the world which is the location of the biggest event occurring in a night and an anti-coordination motive in trying to achieve product differentiation. The firms play a static Bayesian game, taking actions based on noisy public and private information signals. In the unique, symmetric equilibrium, the firms... (More)
- The aim of this thesis is to investigate information use, equilibrium behavior and social welfare in a duopoly market with anti-coordination. The analysis is conducted through the application of a game theoretic model first introduced in a 2002 seminal paper by Morris and Shin, to the Los Angeles stringer industry. In this setting, freelance journalists selling footage to news networks have a motive to match some fundamental state of the world which is the location of the biggest event occurring in a night and an anti-coordination motive in trying to achieve product differentiation. The firms play a static Bayesian game, taking actions based on noisy public and private information signals. In the unique, symmetric equilibrium, the firms choose an action where they assign greater weight to the private signal than is socially optimal. Social welfare analysis indicates that increased precision of public information always increases welfare while increased precision of private information always decreases welfare, as it induces firms to further overweigh their private information and, therefore, to obtain suboptimal footage. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8949703
- author
- Svedberg, Andrea LU
- supervisor
- organization
- course
- NEKN01 20181
- year
- 2018
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Information, Social Welfare, Game Theory, Duopoly
- language
- English
- id
- 8949703
- date added to LUP
- 2018-07-03 14:21:25
- date last changed
- 2018-07-03 14:21:25
@misc{8949703, abstract = {{The aim of this thesis is to investigate information use, equilibrium behavior and social welfare in a duopoly market with anti-coordination. The analysis is conducted through the application of a game theoretic model first introduced in a 2002 seminal paper by Morris and Shin, to the Los Angeles stringer industry. In this setting, freelance journalists selling footage to news networks have a motive to match some fundamental state of the world which is the location of the biggest event occurring in a night and an anti-coordination motive in trying to achieve product differentiation. The firms play a static Bayesian game, taking actions based on noisy public and private information signals. In the unique, symmetric equilibrium, the firms choose an action where they assign greater weight to the private signal than is socially optimal. Social welfare analysis indicates that increased precision of public information always increases welfare while increased precision of private information always decreases welfare, as it induces firms to further overweigh their private information and, therefore, to obtain suboptimal footage.}}, author = {{Svedberg, Andrea}}, language = {{eng}}, note = {{Student Paper}}, title = {{Information Use and Social Welfare in a Duopoly with Anti-Coordination}}, year = {{2018}}, }