Abstract
Abstract A competitive industry in which there is both stochastic demand and a production lag is examined. All agents observe costless endogenous information (prices), and informed agents also observe costly exogenous information. Solutions for market equilibria are found under quite general conditions. A number of issues are examined, including 1. 1) the way in which prices transmit information from the informed to the uninformed, 2. 2) how the specification of the private information set and of the stochastic processes driving demand influence market equilibria, 3. 3) whether the equilibrium distribution of information may expected to be hierarchical, and 4. 4) whether the equilibrium distribution of information is socially optimal.
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