Prof. Romain Lestage (East China University of Science and Technology) at the Faculty of Economic Sciences UW

On June 18, another meeting took place as part of the seminar series dedicated to competition and market regulation topics. Prof. Romain Lestage (East China University of Science and Technology) delivered a lecture titled “Strategic Disclosure to Rivals and Suppliers with Endogenous Screening”.

In his research, Prof. Romain Lestage focuses on competition theory, particularly regulations and innovations in digital and telecommunications markets. He also analyzes how economic analysis can shape public policy and regulatory decision-making processes.

The seminar took place at 5:00 PM in a hybrid format – both on-site in room A203 (WNE) and online via the Zoom platform.

The abstract of the presentation is available below.

 

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Abstract

Firms often operate in environments in which private information has strategic value for both vertically related partners and product-market rivals. This paper studies how voluntary disclosure can serve as an alternative to costly screening in such environments. We develop a framework in which a privately informed producer interacts with both a distributor and a rival. The producer may disclose information horizontally to the rival, vertically to the distributor, or both, while the distributor can otherwise acquire information endogenously through contractual screening. Vertical disclosure therefore involves a trade-off between preserving informational rents and reducing the contractual distortions generated by screening. We show that disclosure becomes profitable when the efficiency gains from mitigating screening distortions outweigh the associated loss of informational rents, particularly when the producer’s outside option is sufficiently strong. Product-market competition further modifies this trade-off through rivals’ strategic responses to vertical disclosure. Screening also reshapes horizontal disclosure incentives: rather than depending on the classical trade-off between favorable and unfavorable states, disclosure incentives are governed solely by rival responses in unfavorable states.