Sharing of Cost Related Information Can Increase Consumer Welfare Under Risk-aversion

Mungan Murat C. ()
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Mungan Murat C.: George Mason University School of Law, Arlington, Virginia 22201-4426, USA

Review of Law & Economics, 2019, vol. 15, issue 2, 12

Abstract: Existing literature suggests that the sharing of firm-specific information related to costs of production among Cournot competitors unambiguously reduces consumer welfare. This article shows that this result does not hold when at least one firm is risk-averse. Perhaps more importantly, if consumers are sufficiently risk-averse allowing information sharing leads to a Pareto improvement.

Keywords: information sharing; cost uncertainty; risk-aversion; consumer welfare; firm-specific information (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1515/rle-2019-0002

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