Price Coordination with Asymmetric Information Sharing: Theory and Evidence

Platform-based information sharing among ostensibly competing firms presents a challenge for antitrust authorities, as evidenced by, for example, issues surrounding the Informed Sources antitrust case and its price-sharing platform for retail gasoline stations. Even when anticompetitive effects of information sharing are clear, effective remedies may not be. We provide a theoretical model that offers guidance for disrupting anticompetitive coordination facilitated through a price-sharing platform. Our analysis highlights the potential ineffectiveness of removing only one participant from the platform and points to benefits from the combination of ensuring that (i) at least two substantive market participants do not have ready access to each other's prices and (ii) the costs of price leadership are sufficiently high.

Keywords: collusion, Information sharing, Price sharing platform, Collusion

JEL Classification: D22, D43, D83, L13

Suggested Citation: Suggested Citation

Byrne, David P. and de Roos, Nicolas and Lewis, Matthew S. and Marx, Leslie M. and Wu, Xiaosong, Price Coordination with Asymmetric Information Sharing: Theory and Evidence (October 17, 2024). Available at SSRN: https://ssrn.com/abstract=4923791 or http://dx.doi.org/10.2139/ssrn.4923791