Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Thursday, September 23, 2010

Knowing Versus Telling Private Information About a Rival

Posted by D. Daniel Sokol

Mark Bagnoli and Susan G. Watts (both Purdue School of Management) explain Knowing Versus Telling Private Information About a Rival.

ABSTRACT: As part of a broad competitive intelligence strategy, firms expect to acquire information about their rivals’ customers and production processes. In this study, we examine the firms’ incentives to disclose this information. We find that firms adopt a policy of disclosing their information regardless of whether it concerns a rival’s customers or production costs or whether the firms are Cournot or Bertrand competitors. Firms that have private information about their rivals tell. Their willingness to disclose private information about their rivals contrasts with the results in the literature when the firm has information about itself. This literature shows that the chosen disclosure policy depends on whether information is about the firm’s own payoffs or industry demand and whether the firms’ strategies are substitutes or complements. 

http://lawprofessors.typepad.com/antitrustprof_blog/2010/09/knowing-versus-telling-private-information-about-a-rival.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef013487580633970c

Listed below are links to weblogs that reference Knowing Versus Telling Private Information About a Rival:

Comments

Post a comment