Abstract
We study the effect of sharing cost information in dynamic oligopoly. Firms can agree to verifiably share information about common costs, as with the aggregation of input costs by an industry trade association. Cost information that is not directly shared is revealed through observed prices. We show that information sharing agreements lead to higher prices and reduce the incentive to acquire firm specific cost information. Information sharing decreases consumer surplus when either demand is sufficiently inelastic or goods are sufficiently substitutable. For markets with a large number of firms, information sharing has a minimal impact on expected prices, and can increase both consumer and producer surplus when goods are sufficiently differentiated.
Presented by Gregory Kubitz, QUT
About the presenter’s visit
Dr Gregory Kubitz will be visiting the School of Economics on Friday 9th August 2019. While here he will be using room 520A Colin Clark Building. If you would like to meet with him or have lunch or dinner with him please contact Dr Zachary Breig who will be his host while at The University of Queensland. Dr Breig can be contacted on z.breig@uq.edu.au.
About School Seminar Series
The School of Economics General Seminar Series is held on Fridays. These are in-person and presented by a range of guest researchers from around Australia and internationally.