On the robustness of concealing cost information in oligopoly

Abstract

Competing firms are usually better informed about their own cost parameters than about those of their rivals. Therefore, it is an important issue to study the incentives of firms to exchange private cost information. We resolve and further generalize an influential model of Raith (1996) and show that, independent of the number of firms, concealing cost information is a dominant firm strategy in heterogeneous Bertrand oligopolies with substitutive as well as with complementary goods.cost uncertainty