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Strategic Disclosure of Demand Information by Duopolists: Theory and Experiment

Author

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  • Jos Jansen

    (Aarhus Universtity and Max Planck Institute for Research on Collective Goods)

  • Andreas Pollak

    (University of Cologne)

Abstract

We study the strategic disclosure of demand information and product-market strategies of duopolists. In a setting where both firms receive information with some probability, we show that firms selectively disclose information in equilibrium in order to influence their competitor’s product-market strategy. Subsequently, we analyze the firms’ behavior in a laboratory experiment. We find that subjects often use selective disclosure strategies, and this finding appears to be robust to changes in the information structure, the mode of competition, and the degree of product differentiation. Moreover, in our experiment, subjects’ product-market conduct is largely consistent with theoretical predictions.

Suggested Citation

  • Jos Jansen & Andreas Pollak, 2015. "Strategic Disclosure of Demand Information by Duopolists: Theory and Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2015_09, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2015_09
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    References listed on IDEAS

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    Cited by:

    1. Dmitry A. Shapiro & Jaesun Lee, 2022. "Revealing Negative Information in Monopoly and Duopoly Settings: Experimental Analysis," Korean Economic Review, Korean Economic Association, vol. 38, pages 167-205.

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    More about this item

    Keywords

    common value; product differentiation; Asymmetry; Duopoly; information disclosure; skewed distribution; Incomplete Information; laboratory experiment; Cournot competition; Bertrand competition;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

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