Information sharing with scarce goods in Cournot retailers

This paper studies the incentives for firms to share information vertically in a two-level supply chain formed by one upstream manufacturer with limited production capacity, and many downstream retailers. The retailers are engaged in a Cournot competition, and are endowed with some private demand information. We show that a discriminated allocation strategy may encourage retailers to share information, and we generate the optimal parameter for the equilibrium of information sharing.