Entry and Exchanges of Cost Information

The literature on exchanges of information has ignored firms' entry decisions. Yet, the Federal Trade Commission recently expressed concerns that exchanges of information in business-to-business electronic platforms would adversely impact entry and, thus, consumers. When entry decisions are endogenized in a competitive Cournot model with cost uncertainty, we find results that contrast sharply with current thinking on the welfare consequences of information sharing.

An Empirical Model of Entry Across Airline Routes with Incomplete Information and Demand Synergies

We define a model of simultaneous entry decisions for N symmetric firms across M markets with demand synergies and incomplete information on marginal costs of production.