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Too Much Information Sharing? Welfare Effects of Sharing Acquired Cost Information in Oligopoly

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  • Juan-José Ganuza
  • Jos Jansen

Abstract

By using general information structures and precision criteria based on the dispersion of conditional expectations, we study how oligopolists' information acquisition decisions may change the effects of information sharing on the consumer surplus. Sharing information about individual cost parameters gives the following trade-off in Cournot oligopoly. On the one hand, it decreases the expected consumer surplus for a given information precision, as the literature shows. On the other hand, information sharing increases the firms' incentives to acquire information, and the consumer surplus increases in the precision of the firms' information. Interestingly, the latter effect may dominate the former effect.

Suggested Citation

  • Juan-José Ganuza & Jos Jansen, 2012. "Too Much Information Sharing? Welfare Effects of Sharing Acquired Cost Information in Oligopoly," Working Paper Series in Economics 54, University of Cologne, Department of Economics.
  • Handle: RePEc:kls:series:0054
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    Cited by:

    1. Stroffolini, Francesca, 2012. "Access profit-sharing regulation with information acquisition and transmission," Research in Economics, Elsevier, vol. 66(2), pages 161-174.
    2. Thomas D. Jeitschko & Ting Liu & Tao Wang, 2016. "Information Acquisition, Signaling and Learning in Duopoly," Department of Economics Working Papers 16-07, Stony Brook University, Department of Economics.
    3. Kazunori Miwa, 2016. "Welfare Effects of Endogenous Information Acquisition and Disclosure in Duopoly Markets," Discussion Paper Series DP2016-17, Research Institute for Economics & Business Administration, Kobe University.

    More about this item

    Keywords

    Information acquisition; information sharing; information structures; oligopoly; consumer surplus;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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