Asymmetric Information Sharing in Oligopoly: A Natural Experiment in Retail Gasoline

S-Tier
Journal: Journal of Political Economy
Year: 2025
Volume: 133
Issue: 7
Pages: 2031 - 2088

Authors (5)

David P. Byrne (not in RePEc) Nicolas de Roos (not in RePEc) Matthew S. Lewis Leslie M. Marx (not in RePEc) Xiaosong Wu (not in RePEc)

Score contribution per author:

1.609 = (α=2.01 / 5 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Using a natural experiment from a retail gasoline antitrust case, we study how asymmetric information sharing affects oligopoly pricing. Empirically, price competition softens when, following case settlement, information sharing shifts from symmetric to asymmetric, with one firm losing access to high-frequency granular rival price data. We provide theory and empirics illustrating how strategic ignorance creates price commitment, leading to higher price-cost margins. Using a structural model, we find substantial profit-enhancing effects of asymmetric information sharing. These results provide a cautionary tale for antitrust agencies regarding the potential unintended consequences of limiting price information sharing among firms.

Technical Details

RePEc Handle
repec:ucp:jpolec:doi:10.1086/734872
Journal Field
General
Author Count
5
Added to Database
2026-01-25