Information exchange with cost uncertainty: An alternative approach and new results

Stephan O. Hornig

No 240, Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics

Abstract: This paper further develops the standard modelling of information exchange between firms in the presence of cost uncertainty. In order to avoid consistency problems, we replace the normal distribution of the random variables, commonly used because of its convenient mathematical properties, by an alternative one, namely a non-symmetrically distributed random variable with a binomial positive outcome. This leads to new results concerning firms' information-disclosure policy: Confirming the empirical evidence and in contrast to the existing literature, we show that in Cournot markets firms never exchange their private information and in Bertrand markets only for very steep demand functions.

Keywords: information sharing; cost uncertainty; oligopoly (search for similar items in EconPapers)
JEL-codes: C72 C73 D43 D82 L13 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuedps:240

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