Information Sharing and Competition in the Motor Vehicle Industry

Board of Governors of the Federal Reserve System Finance and Econ. Disc. Series 97-4

36 Pages Posted: 2 Apr 1997

See all articles by Maura P. Doyle

Maura P. Doyle

affiliation not provided to SSRN

Christopher M. Snyder

Dartmouth College - Department of Economics; National Bureau of Economic Research

Date Written: December 19, 1996

Abstract

Up to six months ahead of actual production, U.S. automakers announce plans for their monthly domestic production of cars. A leading industry trade journal publishes the initial plan and then a series of revisions leading up to the month in question. We analyze a panel data set spanning the years 1965-1995, matching the production forecasts with data for actual monthly production. We show that a firm's plan announcement affects competitors' later revisions of their own plans and eventual production. The interaction appears to be complementary--large plans or upward revisions cause competitors to revise plans upward and increase production. The results are consistent with models in which firms share information about common demand parameters.

JEL Classification: L13, D82

Suggested Citation

Doyle, Maura P. and Snyder, Christopher M., Information Sharing and Competition in the Motor Vehicle Industry (December 19, 1996). Board of Governors of the Federal Reserve System Finance and Econ. Disc. Series 97-4, Available at SSRN: https://ssrn.com/abstract=15107 or http://dx.doi.org/10.2139/ssrn.15107

Maura P. Doyle (Contact Author)

affiliation not provided to SSRN

Christopher M. Snyder

Dartmouth College - Department of Economics ( email )

301 Rockefeller Hall
Hanover, NH 03755
United States
(603) 646-0642 (Phone)
(603) 646-2122 (Fax)

HOME PAGE: http://www.dartmouth.edu/~csnyder/

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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