Acquisition, Aggregation, and Sharing of Information in Sequential-Move Aggregative Games
- American Economic Journal: Microeconomics (Forthcoming)
We study quadratic payoff common-value sequential-move aggregative games
with signaling. Applications include Stackelberg quantity-setting, public good
contribution, common resource, gas emission, and manufacturer-retailer games.
Whereas efficient aggregation of information occurs in large Stackelberg markets, it does not occur in the four remaining large markets. If all agents share
their information with their followers, expected welfare increases in the Stackelberg and supply chain games and it decreases in the remaining three games.
Finally, we characterize the conditions for payoffs and welfare to increase with
more precise private or public information. We also provide robustness checks
when the values are private.
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