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Risk and Revelation: Changing the Value of Information
Author(s) -
Creane Anthony
Publication year - 1998
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/1468-0335.00126
Subject(s) - commit , incentive , private information retrieval , competition (biology) , microeconomics , value (mathematics) , economics , risk aversion (psychology) , function (biology) , value of information , revelation , work (physics) , actuarial science , expected utility hypothesis , financial economics , mathematical economics , computer science , art , ecology , computer security , literature , database , machine learning , evolutionary biology , biology , mechanical engineering , engineering
A different approach is introduced to determine the value of an information‐sharing agreement: the measure of risk aversion/loving. This approach reveals the relationship between information‐sharing models and the risk literature. It also allows uncertainty regarding the slope of a firm’s own demand function to be examined which previous work eschews. The results suggest that the incentive to reveal information is more prevalent than previously thought: firms prefer to commit to reveal private valued information in both quantity and price competition. This differs from previous work where the incentive to commit depended on the type of competition.