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A test for information sharing in Cournot oligopoly

Authors
Journal
Information Economics and Policy
0167-6245
Publisher
Elsevier
Publication Date
Volume
8
Issue
1
Identifiers
DOI: 10.1016/0167-6245(95)00014-3
Keywords
  • Information Sharing
  • Antitrust

Abstract

Abstract The paper suggests using the average squared sales as a test for non-collusive information sharing in Cournot oligopoly. A risk averse firm is better off with non-collusive information sharing only if its average squared sales increases. Collusion usually reduces the average squared sales. Hence information sharing is likely non-collusive if it increases the average squared sales. If firms' average squared sales increase with information sharing, not only collusion is unlikely, but also the social welfare increases provided firms do not collude. Thus information sharing should be granted if it increases firms' average squared sales.

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