## Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

## If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

# Private Information, Strategic Behavior, and Efficiency in Cournot Markets

Xavier Vives
The RAND Journal of Economics
Vol. 33, No. 3 (Autumn, 2002), pp. 361-376
Stable URL: http://www.jstor.org/stable/3087462
Page Count: 16
Preview not available

## Abstract

When analyzing a Cournot market with strictly convex costs dependent on a private information parameter, do we err more by ignoring market power or by ignoring the impact of incomplete information? Is the welfare loss at the market outcome driven by private information or by market power? The answer to both questions is that in large enough markets, abstracting from market power provides a much better approximation than abstracting from private information. Let n index the size of the market and the (free entry) number of firms. Then the effect of market power (private information) is of the order of 1/n $(1/\sqrt n)$ for prices and 1/n2 (1/n) for per-capita deadweight loss.

• 361
• 362
• 363
• 364
• 365
• 366
• 367
• 368
• 369
• 370
• 371
• 372
• 373
• 374
• 375
• 376