Upstream Monopoly and Downstream Information Sharing

Pio Baake and Andreas Harasser

No 1635, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: We analyze a vertical structure with an upstream monopoly and two downstream retailers. Demand is uncertain but each retailer receives an informative private signal about the state of the demand. We construct an incentive compatible and ex ante balanced mechanism which induces the retailers to share their information truthfully. Information sharing can be profitable for the retailers but is likely to be detrimental for social welfare.

Keywords: information sharing; upstream monopoly; vertical relations (search for similar items in EconPapers)
JEL-codes: D82 L13 L14 (search for similar items in EconPapers)
Pages: 25 p.
Date: 2017
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
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