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Core Existence in Vertically Differentiated Markets

Author

Listed:
  • Jean J. Gabszewicz

    (CORE, Universite' Catholique de Louvain, Belgium)

  • Marco A. Marini

    (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy)

  • Ornella Tarola

    (University of Rome La Sapienza, Rome, Italy)

Abstract

We prove that a sufficient condition for the core existence in a n-firm vertically differentiated market is that the qualities of firmÂ’ products are equally-spaced along the quality spectrum. This result contributes to see that a fully collusive agreement among firms in such markets is more easily reachable when product qualities are not distributed too asymmetrically along the quality ladder.

Suggested Citation

  • Jean J. Gabszewicz & Marco A. Marini & Ornella Tarola, 2016. "Core Existence in Vertically Differentiated Markets," DIAG Technical Reports 2016-01, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    • Handle: RePEc:aeg:report:2016-01
    as

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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gabszewicz Jean J. & Marini Marco A. & Tarola Ornella, 2019. "Endogenous Mergers in Markets with Vertically Differentiated Products," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(1), pages 1-22, January.
    2. Gabszewicz, Jean J. & Marini, Marco A. & Tarola, Ornella, 2017. "Vertical differentiation and collusion: Pruning or proliferation?," Research in Economics, Elsevier, vol. 71(1), pages 129-139.
    3. Marco A. Marini, 2018. "Collusive agreements in vertically differentiated markets," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume II, chapter 3, pages 34-56, Edward Elgar Publishing.
    4. Takeda, Kohei & Hosoe, Toyoki & Watanabe, Takayuki & Matsubayashi, Nobuo, 2018. "Stability analysis of horizontal mergers in a market with asymmetric substitutability," Mathematical Social Sciences, Elsevier, vol. 96(C), pages 73-84.
    5. Bos, Iwan & Marini, Marco A. & Saulle, Riccardo D., 2020. "Cartel formation with quality differentiation," Mathematical Social Sciences, Elsevier, vol. 106(C), pages 36-50.
    6. Jean J. Gabszewicz & Marco A. Marini & Skerdilajda Zanaj, 2023. "Random encounters and information diffusion about product quality," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 32(2), pages 348-376, April.
    7. Gabszewicz, Jean J. & Marini, Marco A. & Tarola, Ornella, 2016. "Vertical Differentiation and Collusion: Cannibalization or Proliferation?," ETA: Economic Theory and Applications 232221, Fondazione Eni Enrico Mattei (FEEM).
    8. Stamatopoulos, Giorgos, 2018. "Cooperative games with externalities and probabilistic coalitional beliefs," MPRA Paper 92862, University Library of Munich, Germany.
    9. Aymeric Lardon, 2019. "On the coalitional stability of monopoly power in differentiated Bertrand and Cournot oligopolies," Theory and Decision, Springer, vol. 87(4), pages 421-449, November.

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    More about this item

    Keywords

    Vertically Differentiated Markets ; Price Collusion ; Grand Coalition ; Coalition Stability ; Core;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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