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1543 Information Acquisition in Vertical Relations Pio Baake, Andreas Harasser, Friederike Heiny 2016 18 S.
Forthcoming in: The B.E. Journal of Economic Analysis and Policy (2017)

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Abstract:

We analyze a simple supply chain with one supplier, one retailer and uncertainty about market demand. Focusing on the incentives of the supplier and the retailer to enhance their private information about the actual market conditions, we show that choices on information acquisition are strategic complements. While the retailer's incentives are mainly driven by the information rent that he can earn, the supplier will choose to acquire information only if the retailer is rather well informed, even though the information is free of charge.

JEL-Classification:

D82;D83;D86

Keywords:

Asymmetric information, information acquisition, vertical relations