On the welfare effects of adverse selection in oligopolistic markets

• 成果类型: Article
• 署名作者: de Pinto, Marco; Goerke, Laszlo; Palermo, Alberto
• 署名单位: Universitat Trier; IZA Institute Labor Economics; Leibniz Association; Ifo Institut
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2022.11.012
• 发表日期: 2023
• 页码: 22-41
• 关键词: Adverse selection; oligopoly; welfare

摘要

We consider a principal-agent relationship with adverse selection. Principals pay infor-mational rents due to asymmetric information and sell their output in a homogeneous Cournot-oligopoly. We find that asymmetric information may mitigate or more than com-pensate the welfare reducing impact of market power, irrespective of whether the number of firms is given exogenously or determined endogenously by a profit constraint. We further show that welfare in a setting with adverse selection may be higher than the maximized welfare level attainable in a world with perfect observability.(c) 2022 Elsevier Inc. All rights reserved.