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Collusion and the Incentives for Information Sharing

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Author Info
Richard N. Clarke
Abstract

Two steps are required for firms collusively to restrict output in stochastic markets. Firms must homogenize their market estimates by pooling information and they must cooperatively allocate production levels. In this article I examine the incentives for firms to share private information about a stochastic market. I show that there is never a mutual incentive for all firms in an industry to share unless they may cooperate on strategy once information has been shared. This situation is unfortunate, as society's welfare is maximized only when firms share information, but act competitively.

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Publisher Info
Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 14 (1983)
Issue (Month): 2 (Autumn)
Pages: 383-394
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Handle: RePEc:rje:bellje:v:14:y:1983:i:autumn:p:383-394

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  1. Frédéric KOESSLER, 2002. "Partial Certifiability and Information Precision in a Cournot Game," Working Papers of BETA 2002-03, Bureau d'Economie Théorique et Appliquée, ULP, Strasbourg. [Downloadable!]
  2. Chalil, Diana, 2008. "Market power and subsidies in the Indonesian palm oil industry," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6022, Australian Agricultural and Resource Economics Society. [Downloadable!]
  3. Lagerlöf, Johan N.M., 2003. "Insisting on a Non-negative Price: Oligopoly, Uncertainty, Welfare and Multiple Equilibria," CEPR Discussion Papers 3901, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Yasuhiro Sakai & Akihiko Yoshizumi, 1991. "The impact of risk aversion on information transmission between firms," Journal of Economics, Springer, vol. 53(1), pages 51-73, February. [Downloadable!] (restricted)
  5. Lucy F. Ackert & Bryan K. Church & Mandira Roy Sankar, 1998. "Voluntary disclosure under imperfect competition: Experimental evidence," Working Paper 98-7, Federal Reserve Bank of Atlanta. [Downloadable!]
    Other versions:
  6. Bipasa Datta, . "Experimentation, Information sharing and Oligopoly Limit Pricing," Discussion Papers 99/34, Department of Economics, University of York. [Downloadable!]
  7. J. Andrés Faíña Medín & Jesús López Rodríguez & José López Rodríguez, 2003. "Information Exchanges in Cournot Duopolies," Revista Brasileira de Economia, Graduate School of Economics, Getulio Vargas Foundation (Brazil), vol. 57(1), April. [Downloadable!]
  8. José J. Sempere Monerris & Amparo Urbano & María Dolores Alepuz, 1998. "- Duopoly Price Communication," Working Papers. Serie AD 1998-26, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  9. David Malueg & Shunichi Tsutsui, 1996. "Coalition-proof information exchanges," Journal of Economics, Springer, vol. 63(3), pages 259-278, October. [Downloadable!] (restricted)
  10. Maura P. Doyle & Christopher M. Snyder, 1997. "Information sharing and competition in the motor vehicle industry," Finance and Economics Discussion Series 1997-4, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  11. Brett Trueman, 1986. "The Release of Propreitary Information as a Means of Reducing Competitive Costs," University of California at Los Angeles, Anderson Graduate School of Management 1199, Anderson Graduate School of Management, UCLA. [Downloadable!]
  12. William Novshek & Lynda Thoman, 1997. "Capacity Choice and Duopoly Incentives for Information Sharing," CIG Working Papers FS IV 97-13, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG). [Downloadable!]
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  13. Lowell Johnson, 1997. "The Incentive of Cournot Duopolists to Reveal Cost Information After Costs are Realized," Departmental Working Papers 199704, Rutgers University, Department of Economics. [Downloadable!]
  14. Sergio Currarini & Francesco Feri, 2007. "Bilateral Information Sharing in Oligopoly," Working Papers 2007_21, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
    Other versions:
  15. Young-Ro Yoon, 2008. "Strategic Disclosure of Valuable Information within Competitive Environments," Caepr Working Papers 2008-022, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington. [Downloadable!]
  16. Iván Major, 2006. "Why do (or do not) banks share customer information? A comparison of mature private credit markets and markets in transition," IEHAS Discussion Papers 0603, Institute of Economics, Hungarian Academy of Sciences, revised 24 Apr 2006. [Downloadable!]
  17. Hae-Shin Hwang & Nam-Soon Lee, 1992. "Effect Of Risk Aversion On The Incentive To Share Information," International Economic Journal, Korean International Economic Association, vol. 6(4), pages 17-31, December. [Downloadable!] (restricted)
  18. Peter Cramton & Thomas R. Palfrey, 1991. "Cartel Enforcement with Uncertainty About Costs," Papers of Peter Cramton 90ier, University of Maryland, Department of Economics - Peter Cramton, revised 09 Jun 1998. [Downloadable!]
    Other versions:
  19. Jim Jin, 1998. "Information sharing about a demand shock," Journal of Economics, Springer, vol. 68(2), pages 137-152, June. [Downloadable!] (restricted)
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