The Korean Economic Review
Investor’s Information Sharing with Firms in Oligopoly
Myeonghwan Cho (University of Seoul)Year 2019Vol. 35No. 2
We study the incentives for an investor to transmit information to its invested firms in an oligopoly. The investor has more information on market conditions than the firms and reveals it publicly or privately before the firms produce the goods. When the investor uses a public channel to transmit information, the investor does not reveal any of its information to the firms. When the investor uses a private channel to transmit information, it partially reveals such a private information to the firm. Indeed, this is possible only when the investor invests relatively more in one firm than in another firm.