Disclosing Endogenous Cost Information

• 成果类型: Article
• 署名作者: Jiang, Xu; Xiong, Yan
• 署名单位: Duke University; University of Hong Kong
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2023-0296
• 发表日期: 2025
• 页码: 249-268
• 关键词: competition; cournot; POLICY

摘要

We study voluntary cost disclosure by duopoly firms when they can invest in a cost-reduction technology, i.e., when their private cost is endogenously determined. We find that, contrary to most of the literature, firms disclose their endogenous cost information regardless of the type of competition. The underlying mechanisms and welfare implications, however, are different. Under Bertrand competition, cost disclosure helps a firm avoid aggressive investment in cost reduction to coordinate actions to the mutual advantage of the duopoly firms. Under Cournot competition, disclosing cost information enables a firm to show a hardened stance toward the competing firm. Although firms gain from their disclosure decisions under Bertrand competition, their disclosure decisions under Cournot competition place them in a prisoner's dilemma, as both firms would be better off if they chose not to disclose their information. Consequently, consumers may lose under Bertrand competition but gain under Cournot competition.