Disclosure to competitors in light of endogenous firm investments

• 成果类型: Article
• 署名作者: Arya, Anil; Frimor, Hans; Mittendorf, Brian; Pfeiffer, Thomas
• 署名单位: University System of Ohio; Ohio State University; University of Southern Denmark; University of Vienna
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.13050
• 发表日期: 2025
• 页码: 1960-1986
• 关键词: product market competition; research-and-development; voluntary disclosure; INFORMATION; cournot; INITIATIVES; oligopoly; duopoly; POLICY

摘要

This paper extends a familiar model of competition and disclosure to incorporate the practical feature that firms may not only hold private information about consumer demand, but they can also influence demand by the investments they make in improving product quality. Such investments can reflect installing new product features, improving durability, adding design enhancements, and the like. This paper demonstrates that investments stand to significantly influence the firm's preference for disclosures and, in fact, become a determining feature of disclosure choice. In particular, under Cournot competition, a firm prefers disclosure when the industry-wide effects of information and investments are concordant. That is, if both product quality and demand information have large positive industry spillovers, disclosure is desirable because it promotes implicit cooperation in investments; if both have low spillover, disclosure permits a firm to convey strength to a rival and then use quantity and quality in concert to dominate the market precisely when the firm's demand is at its peak.