| Abstract: |
The paper deals with the issue of information sharing in a Cournot duopoly by
an innovating firm in the face of a merger with its rival. The innovating firm
would share information about the cost realization with its rival provided the
market size is relatively small or, the R&D technology is relatively more
efficient in a medium market size. However, in a large market, or in a medium
market size with less efficient R&D technology, the innovating firm does not
share information with its rival. We also show that the social welfare may be
higher under incomplete information regime. |