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https://hdl.handle.net/2142/20681
Description
Title
Three essays on trading information
Author(s)
Chung, Heesoo
Issue Date
1992
Doctoral Committee Chair(s)
Kahn, Charles M.
Department of Study
Economics
Discipline
Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, Theory
Language
eng
Abstract
In this thesis, I have examined the models of dynamic competitive behavior on trading information. This information can be seen as a cost reducing manufacturing technique of output. Assume that the value of information is nonincreasing in the number of information holders. For the analysis, two approaches are used to tighten the predictions obtained from dynamic interactions among competing agents: one is game theoretic and the other is price theoretic. The use of refinements in the game theoretic formulation cuts the equilibria back to the sensible ones that the price theoretic formulation automatically chooses.
The first essay of the thesis examines dynamic interactions in a game of information transmission in which an initially informed seller sells the information to many uninformed buyers. A finite horizon dynamic game is examined. The perfectly coalition-proof Nash equilibrium eliminates unstable subgame perfect equilibria, while the set of Pareto-perfect Nash equilibrium outcomes is identical to the set of subgame perfect equilibrium outcomes. Finally, this paper contrasts the dynamic game with the static notion of resale-proof outcomes and shows that the essential difference is due to the adoption of a marginal benefit with a cost of delay in selling the information.
The second essay of the thesis investigates the dissemination of information about production secrets as a price theoretic method, thereby looking at individuals' incentives to purchase and resell the information whose value depends on how limited is the circle which is privy to the information. This paper shows that the inability to prohibit resale limits but does not eliminate the value of reselling the information.
Finally, the third essay of the thesis examines the behavior of oligopolistic firms selling a durable good. Previous work on this issue has focused on the infinite horizon folk theorem results; I focus on noncooperative outcome by examining the case where there is a finite (but distant) end to the game. This paper shows that as the trading period shrinks, the oligopolists saturate the market even more quickly than does the monopolist.
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