Privacy-preserving Information Sharing in Oligopoly Competitions
2026-06-01 • Cryptography and Security
Cryptography and SecurityComputers and SocietyComputer Science and Game Theory
AI summaryⓘ
The authors study how competing suppliers share information about uncertain demand in a market where everyone’s output affects the price. They find that firms don’t share their private information unless there’s a system that both protects their privacy and provides an outside signal to make sharing worthwhile. Simply adding privacy measures isn’t enough; firms with better information need stronger privacy safeguards to feel safe sharing. Their work shows how privacy tools and external signals work together to encourage information sharing among competitors.
Cournot oligopolyinformation sharingprivacy protectiondemand uncertaintyaggregated signalsstrategic disclosureexternal signalgame theoryinformation economicssignal accuracy
Authors
Yuxin Liu, M. Amin Rahimian
Abstract
Information sharing among competing suppliers can improve decision-making under uncertainty, yet strategic concerns regarding rival exploitation often deter voluntary disclosure. We study information-sharing mechanisms in a Cournot oligopoly with uncertain demand, where a platform aggregates suppliers' signals through privacy-preserving channels and may also possess an exogenous external signal. The central challenge is to balance strategic safety with informational utility: privacy noise reduces the exposure of individual signals, but also lowers the value of the shared information pool. We first characterize a baseline setting in which access to aggregated information is contingent on participation. In a two-firm market without an external signal, firms refuse to share regardless of the privacy level. In an \(n\)-firm market, sharing may arise even without privacy safeguards because non-participating firms lose access to the aggregated signal. Building on this baseline, we show that privacy protection alone is insufficient to incentivize disclosure; it must be combined with a sufficiently informative external signal. We further show that firms with more accurate private signals require stronger privacy protection. Overall, our results characterize the sharing-feasible region and highlight the complementarity between privacy design and the external information environment.