| We analyze the incentive for Cournot duopolists to share information, when firms are endowed with private information on the stochastic market demand. Most studies on this issue conclude that, under a common set of assumptions, no sharing is the unique Cournot-Nash equilibrium when oligopolists face a stochastic demand common to all the firms. Models used in these studies assume that firms are risk neutral, and have identical and constant marginal production costs. This conclusion is reexamined by relaxing the assumptions of a constant marginal cost, and of risk neutral firms. We find that homogenous firms with increasing marginal costs have the incentive for information sharing under demand uncertainty. Even if firms are heterogenous, which arise from different marginal production costs or different accuracies of information, firms find it beneficial to share their information under certain sufficient conditions.;We present the optimal acquisition of costly information by duopoly firms who face a common stochastic market demand and who have non-identical, increasing marginal production costs. The marginal cost of information is assumed constant. Our major purpose on information acquisition is to show that an equilibrium exists in such a market: that is, there exists a unique interior equilibrium by which the amount of costly information heterogenous firms acquire is endogenously determined. From this result we investigate the change in the slope of marginal production cost and the cost of acquiring information. |
