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Coalition-proof information exchanges

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Abstract

In a three-firm oligopoly model we show that, in addition to being a simple Nash equilibrium, information sharing among all firms is sometimes coalition-proof, and, information exchange among a proper subset of the firms can constitute a coalition-proof equilibrium. Thus, information exchange among firms, even without collusion on prices or outputs, can be very stable and may occur more widely than previously expected.

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Author notes

  1. David A. Malueg

    Present address: Department of Economics, Tulane University, 206 Tilton Hall, 70118, New Orleans, LA, USA

  2. Shunichi O. Tsutsui

    Present address: KPMG Peat Marwick, 345 Park Avenue, 10154, New York, NY, USA

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    1. David A. Malueg
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    2. Shunichi O. Tsutsui
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    Malueg, D.A., Tsutsui, S.O. Coalition-proof information exchanges. Zeitschr. f. Nationalökonomie 63, 259–278 (1996). https://doi.org/10.1007/BF01227436

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    • DOI: https://doi.org/10.1007/BF01227436

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