Thursday, August 20, 2020
Antitrust authorities view that exchange of individual firms’ sales data is more anti‐competitive than that of aggregate sales data. In this paper, I survey antitrust implications of such inter‐firm information exchange. I argue that both types of information exchange are anti‐competitive under some circumstances. More precisely, I compare profits when each type of information exchange is allowed to that when firms can only observe their own sales (Stigler’s secret price‐cutting model), and the former is bigger than the latter. I also provide a general method to bound the equilibrium profits without such information exchange.