Information exchange through non-binding advance price announcements: An antitrust analysis

Willem Boshoff, Stefan Frübing and Kai Hüschelrath
Authors registered in the RePEc Author Service: Kai Hueschelrath

No 15-060, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We study the welfare effects of non-binding advance price announcements. Applying a differentiated Bertrand model with horizontal products and asymmetric information, we find that such announcements can help firms to gain information on each other thereby allowing them to achieve higher profits. However, our results also show that the overall welfare effects of such announcements in a context of heterogeneous products are not as clear-cut as previous research in a homogeneous products framework has suggested. We conclude that - although non-binding advance price announcements may raise competition concerns - in many settings, their positive effects are likely to outweigh the potential detrimental effects on welfare.

Keywords: antitrust policy; collusion; information exchange; price announcements (search for similar items in EconPapers)
JEL-codes: K21 L41 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-bec and nep-com
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Related works:
Journal Article: Information exchange through non-binding advance price announcements: an antitrust analysis (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:15060

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