Contracting in intermediate markets

Authors

  • Paulo C. Coutinho Instituto de Matemática Pura e Aplicada - IMPA.

DOI:

https://doi.org/10.12660/bre.v7n21987.3099

Abstract

This paper builds three models for intermediate industrial product markets characterized by a monopolist seller and many competitive buyers in an environment with uncertainty and asymmetric information. In the main model the paper analyses credible announcement equilibria, i.e., rational expectations equilibria of the following type. The uninformed agent makes some announcement about how he will act after some information is transmitted to him by the informed agents. Even though he is allowed to behave differently from his announcement, it turns out in a credible announcement equilibria that it is in the best interest of the uninformed agent to fulfill his announcement.

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Published

1987-11-02

Issue

Section

Articles