Abstract
This paper investigates whether and to what extent the presence of risk aversion affects the welfare implications of information transmission in one of the most fundamental oligopoly models—a Cournot duopoly model with common demand uncertainty. It aims to make a bridge between the literature dealing with information sharing in oligopoly and the one discussing the firm under uncertainty. We can show that the average output level of each firm is quite sensitive to the type and amount of information, and that the presence of risk aversion has an effect of decreasing the welfare of firms, whence information transmission may sometimes be harmful rather than beneficial to risk averse firms. These results have some policy implications.
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Sakai, Y., Yoshizumi, A. The impact of risk aversion on information transmission between firms. Zeitschr. f. Nationalökonomie 53, 51–73 (1991). https://doi.org/10.1007/BF01227015
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DOI: https://doi.org/10.1007/BF01227015