Duopoly firms strategically inattentive, leading to coexisting competition equilibrium.
Firms in a competitive market can strategically divide into separate divisions that compete with each other without knowing how their actions affect the overall company or industry. This is called "Strategic Inattention". In a duopoly setting, one firm choosing to ignore this information while the other uses it is a common outcome. This coexistence of inattentive and attentive firms leads to a balanced equilibrium, different from previous research findings.