Sharing of Cost Related Information Can Increase Consumer Welfare Under Risk-Aversion
6 Pages Posted: 17 Aug 2015
Date Written: August 15, 2015
The existing literature generally suggests that the sharing of firm-specific information related to firms' costs of production unambiguously reduces consumer welfare. This note shows that this result does not hold when consumers and least one firm is risk-averse, and consumer welfare is measured by the sum of consumers' expected utilities.
Keywords: Information Sharing, Cost Uncertainty, Risk-Aversion, Consumer Welfare, Firm-Specific Information
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