Econometrica: Mar 1985, Volume 53, Issue 2

Information Sharing in Oligopoly

https://doi.org/0012-9682(198503)53:2<329:ISIO>2.0.CO;2-6
p. 329-344

Esther Gal-Or

We consider an oligopolistic market where firms face an uncertain demand for their product. Each firm observes a private signal for the state of demand and decides whether to reveal it to other firms and how complete this revelation will be. After the stage of information transmission the firm chooses its level of output. We derive pure strategy equilibria that are symmetric and subgame perfect, and demonstrate that no information sharing is the unique Nash equilibrium of the game regardless of the degree of correlation among the private signals.

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