The Strategic Role of Information on the Demand Function in an Oligopolistic Market

Abstract

This paper investigates the incentives for cooperation in market surveys among competitive firms. The analysis relies on a game theoretic model. The main conclusion is that the value of information in a competitive market exhibits a sharp decrease as the number of firms that share the information increases. Thus, the advantage obtained through sharing the cost of a market survey may be upset by the loss due to the spreading of information among the competitors. The consumer's point of view is also studied showing that market surveys are advantageous in terms of consumer surplus, a usual indicator of the consumer's satisfaction.

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