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

Juan-José Ganuza and Jos Jansen

No 54, Working Paper Series in Economics from University of Cologne, Department of Economics

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.

Keywords: Information acquisition; information sharing; information structures; oligopoly; consumer surplus (search for similar items in EconPapers)
JEL-codes: D82 D83 L13 L40 (search for similar items in EconPapers)
Date: 2012-04-18
New Economics Papers: this item is included in nep-bec, nep-com, nep-cta and nep-mic
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Related works:
Journal Article: Too Much Information Sharing? Welfare Effects of Sharing Acquired Cost Information in Oligopoly (2013)
Working Paper: Too Much Information Sharing? Welfare Effects of Sharing Acquired Cost Information in Oligopoly (2010)
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