Entry with two correlated signals : the case of industrial espionage and its positive competitive effects
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Entry with two correlated signals : the case of industrial espionage and its positive competitive effects

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Entry with two correlated signals : the case of industrial espionage and its positive competitive effects

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dc.contributor.author Barrachina Monfort, Alejandro
dc.contributor.author Tauman, Yair
dc.contributor.author Urbano Salvador, Amparo
dc.date.accessioned 2022-05-19T16:27:16Z
dc.date.available 2022-05-19T16:27:16Z
dc.date.issued 2021
dc.identifier.uri https://hdl.handle.net/10550/82895
dc.description.abstract Recent advances in information and communication technologies have increased the incentives for firms to acquire information about rivals. These advances may have major implications for market entry because they make it easier for potential entrants to gather valuable information about, for example, an incumbent's cost structure. However, little theoretical research has actually analyzed this question. This paper advances the literature by extending a one-sided asymmetric information version of Milgrom and Roberts' (1982) limit pricing model. Here, the entrant is allowed access to an intelligence system (IS) of a certain precision that generates a noisy signal on the incumbent's cost structure. The entrant thus decides whether to enter the market based on two signals: the price charged by the incumbent and the signal sent by the IS. Crucially, for intermediate values of IS precision, the set of pooling equilibria with ex-ante profitable market entry is non-empty. Moreover, the probability of ex-ante non-profitable entry is strictly positive. In classical limit pricing models, an entrant never enters in a pooling equilibrium, so this result suggests that the use of an IS may potentially increase competition.
dc.language.iso eng
dc.relation.ispartof International Journal of Game Theory, 2021, vol. 50, num. 1, p. 241-278
dc.rights.uri info:eu-repo/semantics/openAccess
dc.source Barrachina Monfort, Alejandro Tauman, Yair Urbano Salvador, Amparo 2021 Entry with two correlated signals : the case of industrial espionage and its positive competitive effects International Journal of Game Theory 50 1 241 278
dc.subject Espionatge
dc.subject Societat de la informació
dc.subject Competència econòmica
dc.title Entry with two correlated signals : the case of industrial espionage and its positive competitive effects
dc.type info:eu-repo/semantics/article
dc.date.updated 2022-05-19T16:27:17Z
dc.identifier.doi https://doi.org/10.1007/s00182-020-00748-8
dc.identifier.idgrec 152852

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