Collusion in Spatially Separated Markets with Quantity Competition
AbstractThis paper develops the incentives to collude in a model with spatially separated markets and quantity setting firms. We find that increases in transportation costs stabilize the collusive agreement. We also show that, the higher the demand in both markets the less likely will collusion be sustained. Gross and Holahan (Int Econ Rev 44:299–312, 2003 ) use a similar model with price setting firms, we compare their results with ours to analyze the impact of the mode of competition on sustainability of collusion. Further we analyze the impact of collusion on social welfare and find that collusion may be welfare enhancing. Copyright Springer Science+Business Media New York 2013
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Bibliographic InfoArticle provided by Springer in its journal Journal of Industry, Competition and Trade.
Volume (Year): 13 (2013)
Issue (Month): 3 (September)
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Web page: http://springerlink.metapress.com/link.asp?id=105724
collusion; spatial competition; duopoly; L10; R10; D43;
Other versions of this item:
- Kai Andree, 2011. "Collusion in spatially separated markets with quantity competition," Volkswirtschaftliche DiskussionsbeitrÃ¤ge, UniversitÃ¤t Potsdam, Wirtschafts- und Sozialwissenschaftliche FakultÃ¤t 104, UniversitÃ¤t Potsdam, Wirtschafts- und Sozialwissenschaftliche FakultÃ¤t.
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Kai Andree & Juljana Calaki, 2011. "Product differentiation in a spatial Cournot model with asymmetric demand," Economics Bulletin, AccessEcon, vol. 31(2), pages 1125-1130.
- John Gross & William L. Holahan, 2003. "Credible Collusion in Spatially Separated Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(1), pages 299-312, February.
- Hackner, Jonas, 1995. "Endogenous product design in an infinitely repeated game," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 13(2), pages 277-299.
- Chang, Myong-Hun, 1991. "The effects of product differentiation on collusive pricing," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 9(3), pages 453-469, September.
- Chang, Myong-Hun, 1992. "Intertemporal Product Choice and Its Effects on Collusive Firm Behavior," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(4), pages 773-93, November.
- repec:ebl:ecbull:v:12:y:2007:i:1:p:1-7 is not listed on IDEAS
- Kai Andree & Mike Schwan, 2012.
"Collusive market sharing with spatial competition,"
Volkswirtschaftliche DiskussionsbeitrÃ¤ge, UniversitÃ¤t Potsdam, Wirtschafts- und Sozialwissenschaftliche FakultÃ¤t
105, UniversitÃ¤t Potsdam, Wirtschafts- und Sozialwissenschaftliche FakultÃ¤t.
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