Risk advantages and information acquisition

  title={Risk advantages and information acquisition},
  author={Thomas R. Palfrey},
In some competitive situations under uncertainty, less risk averse competitors have an advantage over more risk averse opponents. Private information acquisition by the advantaged players diminishes this advantage by reducing the risk faced by their opponents in a Nash equilibrium. This tradeoff between risk advantages and informational advantages is examined in the context of a duopoly model with uncertain demand. It is found that private information acquisition may reduce the risk advantage… CONTINUE READING


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