Ackert, Lucy F., Church, Bryan K., and Sankar, Mandira Roy

"Voluntary Disclosure Under Imperfect Competition: Experimental Evidence"

JEL codes: D82, L10
Keywords: Information disclosure, private information, product market competitors

Abstract:  This study investigates disclosure behavior when a firm has incentives to influence the actions of a product market rival in a Cournot quantity game. Using the experimental economics method, we find that when the firm receives private information about industry-wide cost, unfavorable (favorable) information is disclsoed (withheld) and the rival adjusts production accordingly. In contrast, when the firm receives private information about firm-specific cost, disclosure behavior is not affected by the favorableness of the information and the rival's production decision is insensitive to the firm's disclosure choice.

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