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Sharing of Cost Related Information Can Increase Consumer Welfare Under Risk-aversion

Author

Listed:
  • Mungan Murat C.

    (George Mason University School of Law, Arlington, Virginia 22201-4426, USA)

Abstract

Existing literature suggests that the sharing of firm-specific information related to costs of production among Cournot competitors unambiguously reduces consumer welfare. This article shows that this result does not hold when at least one firm is risk-averse. Perhaps more importantly, if consumers are sufficiently risk-averse allowing information sharing leads to a Pareto improvement.

Suggested Citation

  • Mungan Murat C., 2019. "Sharing of Cost Related Information Can Increase Consumer Welfare Under Risk-aversion," Review of Law & Economics, De Gruyter, vol. 15(2), pages 1-12, July.
    • Handle: RePEc:bpj:rlecon:v:15:y:2019:i:2:p:12:n:6
    DOI: 10.1515/rle-2019-0002
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    References listed on IDEAS

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    1. Jens Tapking, 2004. "Cost information sharing with uncertainty averse firms," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(4), pages 879-907, May.
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    7. Gal-Or, Esther, 1985. "Information Sharing in Oligopoly," Econometrica, Econometric Society, vol. 53(2), pages 329-343, March.
    8. Trimarchi, Pietro, 2003. "Transfers, uncertainty and the cost of disruption," International Review of Law and Economics, Elsevier, vol. 23(1), pages 49-62, March.
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