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The B.E. Journal of Economic Analysis & Policy

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Volume 17, Issue 1 (Mar 2017)

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Volume 6 (2006)

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Volume 1 (2001)

Information Acquisition in Vertical Relations

Pio Baake
  • Corresponding author
  • DIW Berlin, Mohrenstr. 58, 10117Berlin, Germany
  • Email:
/ Andreas Harasser
  • DIW Berlin, Mohrenstr. 58, 10117Berlin, Germany
  • Email:
/ Friederike Heiny
  • DIW Berlin, Mohrenstr. 58, 10117Berlin, Germany
  • Email:
Published Online: 2017-03-01 | DOI: https://doi.org/10.1515/bejeap-2015-0211

Abstract

We analyse a simple supply chain with one supplier, one retailer and uncertainty about market demand. Focusing on the incentives of the supplier and the retailer to enhance their private information about the actual market conditions, we show that choices on information acquisition are strategic complements. While the retailer’s incentives are mainly driven by the information rent that he can earn, the supplier will choose to acquire information only if the retailer is rather well informed, even though the information is free of charge.

Keywords: asymmetric information; information acquisition; vertical relations

JEL Classification: D82; D83; D86

References

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About the article

Published Online: 2017-03-01



Citation Information: The B.E. Journal of Economic Analysis & Policy, ISSN (Online) 1935-1682, ISSN (Print) 2194-6108, DOI: https://doi.org/10.1515/bejeap-2015-0211. Export Citation

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