Journal of Political Economy Vol. 133 No. 7 2025
Asymmetric Information Sharing in Oligopoly: A Natural Experiment in Retail Gasoline
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.
- DOI
- 10.1086/734872
- Volume
- 133
- Issue
- 7
- Pages
- 2031-2088
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref