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Strategic Disclosure of Demand Information by Duopolists: Theory and Experiment

Listed author(s):
  • Jos Jansen

    ()

    (Department of Economics and Business, Aarhus University, Denmark)

  • Andreas Pollak

    (University of Cologne)

Registered author(s):

    We study the strategic disclosure of demand information and product-market strategies of duopolists. In a setting where firms may fail to receive information, 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, subjects in our experiment display product-market conduct that is largely consistent with theoretical predictions.

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    File URL: ftp://ftp.econ.au.dk/afn/wp/14/wp14_20.pdf
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    Paper provided by Department of Economics and Business Economics, Aarhus University in its series Economics Working Papers with number 2014-20.

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    Length: 57
    Date of creation: 01 Sep 2014
    Handle: RePEc:aah:aarhec:2014-20
    Contact details of provider: Web page: http://www.econ.au.dk/afn/

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    1. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
    2. P. Milgrom., 2009. "What the Seller Won’t Tell You: Persuasion and Disclosure in Markets," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 3.
    3. Ackert, Lucy F. & Church, Bryan K. & Sankar, Mandira Roy, 2000. "Voluntary disclosure under imperfect competition: experimental evidence," International Journal of Industrial Organization, Elsevier, vol. 18(1), pages 81-105, January.
    4. Hwang, Hae-shin, 1994. "Heterogeneity and the Incentive to Share Information in Cournot Oligopoly Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 329-345, May.
    5. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    6. Jos Jansen, 2008. "Information Acquisition and Strategic Disclosure in Oligopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(1), pages 113-148, 03.
    7. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
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