Affiliation:
1. School of Business , 12581 Nanjing University , Nanjing , China
Abstract
Abstract
This article examines firms’ choices on partial (in)attention prior to quantity competition. Being partially (in)attentive, a firm accounts for a part of its market impact. We find that regardless of the number of firms, there is always a unique subgame perfect Nash equilibrium where all firms choose to be partially attentive. The optimal attention level decreases in the number of firms, increases in product differentiation, and converges to zero, i.e. firms tend to be fully inattentive, as either the number of firms goes to infinity or product differentiation goes to zero.
Funder
National Social Science Fund of China
Japan Society for the Promotion of Science
National Natural Science Foundation of China
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