Information, market power, and price volatility

We consider demand function competition with a finite number of agents and private information. show that any degree market power can arise in the unique equilibrium under an information structure is arbitrarily close to complete Regardless correlation payoff shocks, may be zero (the competitive outcome) or large (so there no trade). By contrast, price volatility always lower than variance aggregate shock across all structures. Alternative trading mechanisms lead very distinct bounds as comparison Cournot establishes.