Strategic Partial Inattention in Oligopoly
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Lijun Pan
Abstract
This article examines firms’ choices on partial (in)attention prior to quantity competition. Being partially (in)attentive, a firm accounts for a part of its market impact. We find that regardless of the number of firms, there is always a unique subgame perfect Nash equilibrium where all firms choose to be partially attentive. The optimal attention level decreases in the number of firms, increases in product differentiation, and converges to zero, i.e. firms tend to be fully inattentive, as either the number of firms goes to infinity or product differentiation goes to zero.
Funding source: National Social Science Fund of China
Award Identifier / Grant number: 22&ZD074
Funding source: Japan Society for the Promotion of Science
Award Identifier / Grant number: 19K13681
Funding source: National Natural Science Foundation of China
Award Identifier / Grant number: 71573141
Acknowledgments
I would like to express my gratitude to the Editor, Burkhard C. Schipper, and two anonymous referees for their constructive comments and suggestions. I am also indebted to Takatoshi Tabuchi for his in-depth discussion and generous guidance. I gratefully acknowledge the financial support from the Grant-in-aid for Research Activity, Japan Society for the Promotion of Science (19K13681), National Science Foundation of China (71573141), and National Social Science Fund of China (22&ZD074). The usual disclaimer applies.
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Research funding: This work includes the financial support from the Grant-in-aid for Research Activity, National Social Science Fund of China (22&ZD074), Japan Society for the Promotion of Science (19K13681), and National Science Foundation of China (71573141).
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© 2024 Walter de Gruyter GmbH, Berlin/Boston
Artikel in diesem Heft
- Frontmatter
- Research Articles
- Global Dynamics and Optimal Policy in the Ak Model with Anticipated Future Consumption
- Offsetting Distortion Effects of Head Starts on Incentives in Tullock Contests
- Collusive Price Leadership Among Firms with Different Discount Factors
- Motivating Loyal Bureaucrats in Sequential Agency
- Disclosure of Product Information After Price Competition
- Uncertain Commitment Power in a Durable Good Monopoly
- Optimal Trade Policy in a Ricardian Model with Labor-Market Search-and-Matching Frictions
- Consumer-Benefiting Transport Costs: The Role of Product Innovation in a Vertical Structure
- Information Disclosure by Informed Intermediary in Double Auction
- Notes
- Strategic Partial Inattention in Oligopoly
- The Role of Informative Advertising in Aligning Preferences Over Product Design
- To Bequeath, or Not to Bequeath? On Labour Income Risk and Top Wealth Concentration
Artikel in diesem Heft
- Frontmatter
- Research Articles
- Global Dynamics and Optimal Policy in the Ak Model with Anticipated Future Consumption
- Offsetting Distortion Effects of Head Starts on Incentives in Tullock Contests
- Collusive Price Leadership Among Firms with Different Discount Factors
- Motivating Loyal Bureaucrats in Sequential Agency
- Disclosure of Product Information After Price Competition
- Uncertain Commitment Power in a Durable Good Monopoly
- Optimal Trade Policy in a Ricardian Model with Labor-Market Search-and-Matching Frictions
- Consumer-Benefiting Transport Costs: The Role of Product Innovation in a Vertical Structure
- Information Disclosure by Informed Intermediary in Double Auction
- Notes
- Strategic Partial Inattention in Oligopoly
- The Role of Informative Advertising in Aligning Preferences Over Product Design
- To Bequeath, or Not to Bequeath? On Labour Income Risk and Top Wealth Concentration
