Endogenous Spillovers and Prisoners' Dilemma in Information Sharing

This paper consider s the effects of information sharing of a duopoly. Not only each firm's profit but also the consumers' surplus and social welfare increase after the duopoly share their information. However, Prisoners' Dilemma exists information sharing, i.e., each firm tries to increase its profit through sending lower information to its counterpart, but the result is that each firm's profit as well as the consumers' surplus and social welfare decrease.