Why Isn’t the Accident Information Shared? A Coopetition Perspective Available to Purchase

The purpose of this paper is to investigate both cooperative and competitive strategies of firms that may cause accidents. The firms may exchange information about the previous accidents associated with their products in order to reduce accident probabilities and the amount of damage. Thus, these firms may cooperate on this point. On the other hand, they compete on quantities after deciding whether accident information is to be disclosed. This situation is termed coopetition. In order to address the issue of disclosure of accident information, an economic model is developed and it derives two main conclusions. First, there is a unique equilibrium where firms choose to not disclose their accident information. Second, the equilibrium strategies of firms are Pareto inferior for them when the condition relating to marginal effort costs and potential demands is satisfied. Thus, whether the coopetitive situation that firms exchange their accident information cooperatively and choose their quantity levels competitively is desirable for firms depends on the magnitude of the cost reduction and demand reduction effects.