Business Intelligence and Multi-market Competition

Pascal Billand, Christophe Bravard, Subhadip Chakrabarti, Sudipta Sarangi

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)
203 Downloads (Pure)

Abstract

We consider a multi-market framework where a set of firms compete on two oligopolistic markets. The cost of production of each firm allows for spillovers across markets, ensuring that output decisions for both markets have to be made jointly. Prior to competing in these markets, firms can establish links gathering business intelligence about other firms. A link formed by a firm generates two types of externalities for competitors and consumers. We characterize the business intelligence equilibrium networks and networks that maximize social welfare. By contrast with single market competition, we show that in multi-market competition there exist situations where intelligence gathering activities are underdeveloped with regard to social welfare and should be tolerated, if not encouraged, by public authorities.
Original languageEnglish
Pages (from-to)248-267
Number of pages20
JournalJournal of Public Economic Theory
Volume18
Issue number2
Early online date23 Mar 2016
DOIs
Publication statusPublished - Apr 2016

Bibliographical note

Special Issue: Special Issue on Networks and Externalities

Keywords

  • Multi-market oligopolies, networks, externalities

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