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Information Sharing through Sales Report

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  • Jin, Jim Y

Abstract

This paper studies information sharing through sales reports in Cournot and Bertrand duopolies with common demand uncertainty. Without sales reports, firms choose quantities or prices strategically to manipulate the rivals' perception about the market. Sales reports eliminate firms' incentives to do so and keep them only maximizing the current profits. If firms make independent sales report decisions, no sales report is the unique subgame perfect equilibrium. However in a Cournot (Bertrand) industry firms are better off with sales reports when goods are substitutes (complements). Further, sales reports decrease (increase) consumer surplus and social welfare in a Cournot (Bertrand) industry. The results sharply contrast those from the previous information sharing models where firms exchange signals about the future demand. Copyright 1994 by Blackwell Publishing Ltd.

Suggested Citation

  • Jin, Jim Y, 1994. "Information Sharing through Sales Report," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 323-333, September.
    • Handle: RePEc:bla:jindec:v:42:y:1994:i:3:p:323-33
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    Citations

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    Cited by:

    1. Jin, Jim Y., 1996. "A test for information sharing in Cournot oligopoly," Information Economics and Policy, Elsevier, vol. 8(1), pages 75-86, March.
    2. Chang, Chun-Hao & Prakash, Arun J. & Yeh, Shu, 2004. "Sale of monopoly information and behavior of rivaling clients: A theoretical perspective," Review of Financial Economics, Elsevier, vol. 13(3), pages 283-304.
    3. Karakoç, Gülen & Pagnozzi, Marco & Piccolo, Salvatore, 2022. "The value of transparency in dynamic contracting with entry," International Journal of Industrial Organization, Elsevier, vol. 85(C).
    4. Jeitschko, Thomas D. & Liu, Ting & Wang, Tao, 2018. "Information Acquisition, signaling and learning in duopoly," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 155-191.
    5. Chun‐Hao Chang & Arun J. Prakash & Shu Yeh, 2004. "Sale of monopoly information and behavior of rivaling clients: A theoretical perspective," Review of Financial Economics, John Wiley & Sons, vol. 13(3), pages 283-304.
    6. Florent Venayre, 2004. "Échanges d'informations : les jurisprudences française et communautaire - À l'aune des prédictions théoriques," Revue d'Économie Industrielle, Programme National Persée, vol. 108(1), pages 91-112.
    7. David Spector, 2021. "Market share transparency, signaling and welfare: Cournot and Bertrand," PSE Working Papers halshs-02946654, HAL.
    8. Tim Reuter, 2017. "Endogenous Cartel Organization and Antitrust Fine Discrimination," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 51(3), pages 291-313, November.
    9. Monteiro, Paulo Klinger & Moraga-González, José Luis, 2003. "We Sold a Million Units -- The Role of Advertising Past-Sales," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 57(2), April.
    10. David Kopanyi & Anita Kopanyi-Peuker, 2015. "Endogenous information disclosure in experimental oligopolies," Discussion Papers 2015-11, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    11. Keshab BHATTARAI, 2008. "Bargaining, Coalitions, Signalling and Repeated Games for Economic Development and Poverty Alleviation," EcoMod2008 23800012, EcoMod.
    12. Jim Jin, 1998. "Information sharing about a demand shock," Journal of Economics, Springer, vol. 68(2), pages 137-152, June.

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