|
|
|
|
Title: |
Effect of Risk Aversion on the Incentive to
Share Information |
| Author: |
Hwang, Hae-Shin;
Lee, Nam-Soon |
| Author
Affiliation: |
TX A&M U |
| Source: |
International Economic Journal, Winter 1992, v. 6, no. 4, pp. 17-31 |
|
Publication Date: |
Winter 1992 |
|
Abstract: |
This paper presents a proof that oligopoly
firms have the incentive to share their private information about the
stochastic market demand if they are sufficiently risk averse. A highly
risk averse firm is willing to share its information even when the rival
firm does not have any information of its own. These results are in
contrast with the results of previous studies of risk neutral firms, and
offer a theoretical interpretation of information pooling mechanisms
like trade associations as bona fide information exchange mechanisms
rather than as collusion facilitation organizations. |
|
