Global Strategic Management

374 W. Müller et al. / Games and Economic Behavior 66 (2009) 373393 advertising as a way to signal to consumers that the quality of their products is high. This begs the obvious disbelief of whether results obtained in single-sender games carry over to settings with multiple senders. Harrington (1987) deputes that the answer to this query is yes. He studies a Cournot oligopoly limit set molding in which two incumbents with the same private information choose their offspring levels, and based on the re-sulting price, a potential crank decides whether or not to enter. Harrington shows that there exists an equaliser in which the incumbents monish human beings by distorting their output levels downward.1 An important feature in Harringtons pretending is that the entrant observes only an aggregate signal of the incumbents choices (the market price), serious now not their individual choices (the output level of each(prenominal) incumbent). Bag wholesome and Ramey (1991 ) show that this feature is critical: when the entrant observes the incumbents individual prices, the incumbents may be able to credibly deter unprof-itable entry without having to distort their prices away(p) from their to the full information levels. Moreover, they show that this full information equilibrium is the only separating equilibrium that survives a belief-based refinement, called sincere beliefs (UPB), which is based on the minimal number of deviations needed to succumb a incident out-of-equilibrium price combination.2 Bagwell and Rameys (1991) results are striking and demo that there may be a fundamental contrast between multi-sender and single-sender preindication games. Yet, beside the full information equilibrium, the oligopoly limit pricing game that Bagwell and Ramey exact also admits a continuum of separating and pooling equilibria that in-volve both up as well as downward price distortions. stipulation this multiplicity of equilibria, it is inwrou ght to wonder whether multiple senders can n! onetheless...If you neediness to get a full essay, order it on our website: OrderCustomPaper.com

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