Trade Association Disclosure Rules, Incentives to Share Information, and Welfare

Xavier Vives
1990 The Rand Journal of Economics  
In this article I propose a monopolistic competition framework to analyze the effects of different disclosure rules used by trade associations on the incentives to share information and on the welfare of consumers, firms, and society. This framework is appropriate whenever a single firm cannot irifluence aggregate market magnitudes, and serves as a benchmark for the analysis of information-pooling agreements abstracting from strategic considerations. 1 report two main results. First, a policy
more » ... nonexclusionary disclosure destroys the incentives to share information, while exclusionary disclosure preserves them. Second, information .sharing increases expected total surplus with Coumot competition but decreases it with Bertrand competition in the context ofa Quadratic-Normal model with demand uncertainty.
doi:10.2307/2555617 fatcat:itemmcfiwfgohcgdeq3qxpziha