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Demand Uncertainty and Incentives to Share Information in Duopoly

Incertitude sur la demande et incitations au partage de l'information dans un duopole

Florent Venayre ()

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Abstract: We study the incentives to share information in a duopoly when firms can suffer from a lack of information about demand. We show that if the risk of suffering from a lack of information is not too high, the information sharing is always mutually profitable for the firms, regardless of the competition or the nature of the goods. Moreover, we show that the informational behavior of the firms depends on two factors : the kind of demand uncertainty and the assumptions made about information.

Date: 1999-05
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Published in Revue Economique, 1999

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