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On the robustness of concealing cost information in oligopoly

Author

Listed:
  • Stephan O. Hornig

    (fhs KufsteinTirol, University of Applied Sciences, Department of International Business Studies)

  • Manfred Stadler

    (University of Tübingen, Department of Economics)

Abstract

Competing firms are usually better informed about their own cost parameters than about those of their rivals. Therefore, it is an important issue to study the incentives of firms to exchange private cost information. We resolve and further generalize an influential model of Raith (1996) and show that, independent of the number of firms, concealing cost information is a dominant firm strategy in heterogeneous Bertrand oligopolies with substitutive as well as with complementary goods.

Suggested Citation

  • Stephan O. Hornig & Manfred Stadler, 2006. "On the robustness of concealing cost information in oligopoly," Economics Bulletin, AccessEcon, vol. 12(9), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-05l10041
    as

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    References listed on IDEAS

    as
    1. Esther Gal-or, 1986. "Information Transmission—Cournot and Bertrand Equilibria," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(1), pages 85-92.
    2. Jin, Jim Y., 2000. "A Comment on "A General Model of Information Sharing in Oligopoly," Vol. 71 (1996), 260-288, by Michael Raith," Journal of Economic Theory, Elsevier, vol. 93(1), pages 144-145, July.
    3. Raith, Michael, 1996. "A General Model of Information Sharing in Oligopoly," Journal of Economic Theory, Elsevier, vol. 71(1), pages 260-288, October.
    4. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
    5. Amir Ziv, 1993. "Information Sharing in Oligopoly: The Truth-Telling Problem," RAND Journal of Economics, The RAND Corporation, vol. 24(3), pages 455-465, Autumn.
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    More about this item

    Keywords

    cost uncertainty;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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