Sharing of Cost Related Information Can Increase Consumer Welfare Under Risk-aversion

Document Type

Article

Publication Date

4-2019

Journal Title

Review of Law & Economics

ISSN

1555-5879

DOI

10.1515/rle-2019-0002

Abstract

Existing literature suggests that the sharing of firm-specific information related to costs of production among Cournot competitors unambiguously reduces consumer welfare. This article shows that this result does not hold when at least one firm is risk-averse. Perhaps more importantly, if consumers are sufficiently risk-averse allowing information sharing leads to a Pareto improvement.

First Page

20190002

Volume Number

15

Issue Number

2

Publisher

De Gruyter

Link to Full Text

SSRN

Share

COinS