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Trade Association Disclosure Rules, Incentives to Share Information, and Welfare


  • Xavier Vives


In this article I propose a monopolistic competition framework to analyze the effects of different disclosure rules used by trade associations on the incentives to share information and on the welfare of consumers, firms, and society. This framework is appropriate whenever a single firm cannot influence aggregate market magnitudes, and serves as a benchmark for the analysis of information-pooling agreements abstracting from strategic considerations. I report two main results. First, a policy of nonexclusionary disclosure destroys the incentives to share information, while exclusionary disclosure preserves them. Second, information sharing increases expected total surplus with Cournot competition but decreases it with Bertrand competition in the context of a Quadratic-Normal model with demand uncertainty.

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  • Xavier Vives, 1990. "Trade Association Disclosure Rules, Incentives to Share Information, and Welfare," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 409-430, Autumn.
  • Handle: RePEc:rje:randje:v:21:y:1990:i:autumn:p:409-430

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    References listed on IDEAS

    1. Benvignati, Anita M, 1982. "Interfirm Adoption of Capital-Goods Innovations," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 330-335, May.
    2. V. Kerry Smith, 1974. "The Implications of Regulation for Induced Technical Change," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 623-632, Autumn.
    3. Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, vol. 47(5), pages 1249-1266, September.
    4. Stoneman, P L, 1985. "Technological Diffusion : The Viewpoint of Economic Theory," The Warwick Economics Research Paper Series (TWERPS) 270, University of Warwick, Department of Economics.
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