Information exchange through non-binding advance price announcements: an antitrust analysis

  • Willem Boshoff
  • Stefan Frübing
  • Kai Hüschelrath


We study the welfare effects of non-binding advance price announcements. Applying a simulation-based approach in a differentiated Bertrand model with horizontal products and asymmetric information, we find that such announcements can help firms to gain information on each other thereby allowing them to achieve higher profits. However, our results also show that the overall welfare effects of such announcements in a context of heterogeneous products are not as clear-cut as previous research in a homogeneous products framework has suggested. We conclude that—although non-binding advance price announcements may raise competition concerns—in many settings, their positive effects are likely to outweigh the potential detrimental effects on welfare.


Antitrust policy Collusion Information exchange Price announcements 

JEL Classification

L41 K21 



We are grateful to four anonymous reviewers and Cedric Argenton, Eckart Bueren, Jens-Uwe Franck, Georg Götz, Joe Harrington, Yusuke Ikuta, Catarina Marvao, Matthew Olczak and Konrad Stahl as well the audiences at the 2015 International Industrial Organization Conference in Boston, the 2015 BECCLE Competition Conference in Bergen, the 2015 CLEEN Workshop in Tilburg, the 2015 EALE Conference in Vienna, the 4th International Workshop on the Economics of Competition and Industrial Organization in Cape Town and the 2014 MPI-ZEW Private Law and Economics Workshop in Mannheim for valuable comments and suggestions.


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Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  • Willem Boshoff
    • 1
  • Stefan Frübing
    • 2
  • Kai Hüschelrath
    • 2
    • 3
  1. 1.Department of EconomicsStellenbosch UniversityMatielandSouth Africa
  2. 2.Competition and Regulation Research GroupZEW Centre for European Economic Research and MaCCI Mannheim Centre for Competition and InnovationMannheimGermany
  3. 3.University of Mannheim, L7, 3-5MannheimGermany

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