Information sharing and competition in the motor vehicle industry

Maura P. Doyle and Christopher Snyder

No 1997-4, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Up to six months ahead of actual production, U.S. automakers announce plans for their monthly domestic production of cars. A leading industry trade journal publishes the initial plan and then a series of revisions leading up to the month in question. We analyze a panel data set spanning the years 1965--1995, matching the production forecasts with data for actual monthly production. We show that a firm's plan announcement affects competitors' later revisions of their own plans and eventual production. The interaction appears to be complementary---large plans or upward revisions cause competitors to revise plans upward and increase production. The results are consistent with models in which firms share information about common demand parameters.

Keywords: Automobile; industry; and; trade (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Information Sharing and Competition in the Motor Vehicle Industry (2019)
Journal Article: Information Sharing and Competition in the Motor Vehicle Industry (1999)
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