Journal of Political Economy Vol. 107 No. 6 1999
Information Sharing and Competition in the Motor Vehicle Industry
Abstract
Up to six months ahead of actual production, U.S. automakers announce plans for their monthly domestic production of cars. A leading industry trade journal publishes the initial plans and then a series of revisions leading up to the month in question. We analyze a panel data set spanning the years 1965–95, matching the production forecasts with data for actual monthly production. We show that a firm's plan announcement affects competitors' later revisions of their own plans and eventual production. The interaction appears to be complementary: large plans or upward revisions cause competitors to revise plans upward and increase production. The results are consistent with theoretical models in which firms share information about common demand parameters.
- DOI
- 10.1086/250099
- Volume
- 107
- Issue
- 6
- Pages
- 1326-1364
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref