Incentives for information acquisition in firms

This paper investigates the effects of information acquisition in the light of two different organisational structures in various competitive settings. While the intuitive expectation that growing uncertainty raises the incentives to gather information can be confirmed, a changing organisational structure may also create a comparative tradeoff. A move from nonintegration to integration reflects less competition which tends to make information less valuable. Simultaneously, however, the decision power becomes more concentrated, implying that information is potentially more important. We analyse the interdependencies among organisational, informational and market structures and their impact on the relative incentives for information acquisition.