Department of Economics and Business Economics

Beyond the Need to Boast: Cost Concealment and Exit in Cournot Oligopoly

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This paper studies the incentives for production cost disclosure in an asymmetric Cournot oligopoly. Whereas the efficient firm (consumers) prefers information sharing (concealment) when the firms choose accommodating strategies in the product market, the firm (consumers) may prefer information concealment (sharing) when it can exclude its competitors from the market. Hence, the rankings of expected profit and consumer surplus can be reversed if exit of the inefficient firms is possible. Although the efficient firm has stronger incentives to share information when it shares strategically, there remain cases in which the firm conceals information in equilibrium to induce exit.
Original languageEnglish
JournalResearch in Economics
Volume66
Issue3
Pages (from-to)239-245
Number of pages7
ISSN1090-9443
DOIs
Publication statusPublished - 2012

    Research areas

  • Cournot oligopoly, information disclosure, exit, Cost asymmetry, Precommitment

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