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Information Exchange, Market Transparency and Dynamic Oligopoly

Author

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  • Per Baltzer Overgaard
  • H. Peter Møllgaard

    (School of Economics and Management, University of Aarhus, Denmark)

Abstract

Economic literature often offers conflicting views on the likely efficiency effects of information exchanges, communication between firms, and market transparency. On the one hand, it is argued that increased information dissemination improves firm planning to the benefit of society (including buyers) and allows potential buyers to make correct decisions given their preferences. On the other hand, economic literature also shows that increased information dissemination can raise prices through tacit or explicit collusion to the benefit of firms but at the expense of society at large. This chapter provides a general analytical framework to reconcile these views and presents some basic conclusions for antitrust practice. In addition, the chapter reviews cases from both sides of the Atlantic where informational issues have played a significant role.

Suggested Citation

  • Per Baltzer Overgaard & H. Peter Møllgaard, 2007. "Information Exchange, Market Transparency and Dynamic Oligopoly," Economics Working Papers 2007-03, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2007-03
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    References listed on IDEAS

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    Cited by:

    1. Ireland, Norman & Waterson, Michael, 2006. "Cartels and Search," The Warwick Economics Research Paper Series (TWERPS) 770, University of Warwick, Department of Economics.
    2. Nils-Henrik M. von der Fehr, 2013. "Transparency in Electricity Markets," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    3. Rasch, Alexander & Herre, Jesko, 2013. "Customer-side transparency, elastic demand, and tacit collusion under differentiation," Information Economics and Policy, Elsevier, vol. 25(1), pages 51-59.
    4. Wilson, Chris, 2006. "Markets with Search and Switching Costs," MPRA Paper 131, University Library of Munich, Germany, revised 06 Oct 2006.
    5. Zhang, Xubing & Jiang, Bo, 2014. "Increasing Price Transparency: Implications of Consumer Price Posting for Consumers' Haggling Behavior and a Seller's Pricing Strategies," Journal of Interactive Marketing, Elsevier, vol. 28(1), pages 68-85.
    6. Anne Margarian, 2013. "A Constructive Critique of the Endogenous Development Approach in the European Support of Rural Areas," Growth and Change, Wiley Blackwell, vol. 44(1), pages 1-29, March.

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    More about this item

    Keywords

    Information exchange; oligopoly coordination; cases; antitrust practice;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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