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

Author

Listed:
  • Juan José Ganuza

    (Universitat Pompeu Fabra, Department of Economics and Business)

  • Jos Jansen

    (Max Planck Institute for Research on Collective Goods)

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, 2010. "Too Much Information Sharing? Welfare Effects of Sharing Acquired Cost Information in Oligopoly," Discussion Paper Series of the Max Planck Institute for Behavioral Economics 2010_40, Max Planck Institute for Behavioral Economics.
    • Handle: RePEc:mpg:wpaper:2010_40
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    Cited by:

    1. Catilina, Eliane, 2019. "Information Acquisition with Endogenously Determined Cost in Cournot Markets with Stochastic Demand," MPRA Paper 93896, University Library of Munich, Germany.
    2. Tao Wang, 2020. "Competitive Intelligence and Disclosure of Cost Information in Duopoly," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(3), pages 665-699, November.
    3. Jeitschko, Thomas D. & Liu, Ting & Wang, Tao, 2018. "Information Acquisition, signaling and learning in duopoly," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 155-191.
    4. Troncoso-Valverde, Cristián & Chávez-Bustamante, Felipe, 2024. "Do you want to know a secret? Strategic alliances and competition in product markets," European Journal of Operational Research, Elsevier, vol. 313(3), pages 1180-1190.
    5. Andrea Canidio & Thomas Gall, 2024. "Information Generation in Vertically Differentiated Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 72(1), pages 81-117, March.
    6. Jihad C. Elnaboulsi & Wassim Daher & Yiğit Sağlam, 2023. "Environmental taxation, information precision, and information sharing," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(2), pages 301-341, April.
    7. Schulte, Elisabeth & Friehe, Tim, 2025. "Disclosure depends on who listens: Revealing harm to consumers and competitors," VfS Annual Conference 2025 (Cologne): Revival of Industrial Policy 325372, Verein für Socialpolitik / German Economic Association.
    8. Shy, Oz & Stenbacka, Rune, 2013. "Investment in customer recognition and information exchange," Information Economics and Policy, Elsevier, vol. 25(2), pages 92-106.
    9. Kazunori Miwa, 2021. "An Experimental Study on Information Acquisition and Disclosure in a Cournot Duopoly Market," Discussion Papers in Economics and Business 13-01-Rev, Osaka University, Graduate School of Economics.
    10. Scott M. Gilpatric & Youping Li, 2015. "Information Value Under Demand Uncertainty And Endogenous Market Leadership," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 589-603, January.
    11. Stroffolini, Francesca, 2012. "Access profit-sharing regulation with information acquisition and transmission," Research in Economics, Elsevier, vol. 66(2), pages 161-174.
    12. Yin, Xundong & Wang, Sophie Xuefei & Lu, Yuanzhu & Yan, Jianye, 2023. "Endogenous information acquisition and disclosure of private information in a duopoly," Economic Modelling, Elsevier, vol. 126(C).
    13. 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

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    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
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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