Asymmetric information without common priors: an indirect evolutionary analysis of quantity competition

Werner Gueth, Loreto Llorente Erviti, Anthony Ziegelmeyer

Research output: Contribution to journalArticle

Abstract

The common prior assumption justifies private beliefs as posterior probabilities when updating a common prior based on individual information. We dispose of the common prior assumption for a homogeneous oligopoly market with uncertain costs and firms entertaining arbitrary priors about other firms' cost-type. We show that true prior beliefs can not be evolutionarily stable when truly expected profit measures (reproductive) success.

Original languageEnglish
Pages (from-to)843-852
Number of pages10
JournalJournal of evolutionary economics
Volume21
Issue number5
DOIs
Publication statusPublished - Dec 2011

ASJC Scopus subject areas

  • Economics and Econometrics
  • Business, Management and Accounting(all)

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