Bilateral Information Sharing in Oligopoly

Sergio Currarini () and Francesco Feri ()

Working Papers from Faculty of Economics and Statistics, University of Innsbruck

Abstract: We study the problem of information sharing in oligopoly, when sharing decisions are taken before the realization of private signals. Using the general model developed by Raith (1996), we show that if firms are allowed to make bilateral exclusive sharing agreements, then some degree of information sharing is consistent with equilibrium, and is a constant feature of equilibrium when the number of firms is not too small. Our result is to be contrasted with the traditional conclusion that no information is shared in common values situations with strategic substitutes - such as Cournot competition with demand shocks - when firms can only make industry-wide sharing contracts (e.g., a trade association).

Keywords: Information sharing; oligopoly; networks; Bayesian equilibrium (search for similar items in EconPapers)
JEL-codes: D43 D82 D85 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-com, nep-mic and nep-net
Date: 2007-07

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Working Paper: Bilateral Information Sharing in Oligopoly (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:inn:wpaper:2007-15

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