Advanced Search
MyIDEAS: Login to save this paper or follow this series

Pricing Policy and Partial Collusion

Contents:

Author Info

  • Stefano Colombo

    ()
    (DISCE, Università Cattolica)

Abstract

We study the pricing policy equilibria emerging in a partial collusion duopolistic framework where firms in the first stage of the game choose non-cooperatively whether to price discriminate or not, and from the second stage onward collude on prices.When the discount factor is particularly high or particularly low both firms price discriminate in equilibrium. For intermediate discount factors and high firms'asymmetry, the unique equilibrium is characterized by only the smaller firm choosing price discrimination.In the case of intermediate discount factors and low firms'asymmetry, there are two possible equilibria: both firms price discriminate or no firm price discriminates.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.unicatt.it/Istituti/EconomiaFinanza/Quaderni/ief0090.pdf
File Function: First version, 2009
Download Restriction: no

Bibliographic Info

Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni dell'Istituto di Economia e Finanza with number ief0090.

as in new window
Length: 23
Date of creation: Oct 2009
Date of revision:
Handle: RePEc:ctc:serie3:ief0090

Contact details of provider:
Email:
Web page: http://www.unicatt.it/Istituti/EconomiaFinanza
More information through EDIRC

Related research

Keywords: Partial Collusion; Pricing policy; Price discrimination;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Stefano Colombo, 2009. "Firms' symmetry and sustainability of collusion in a Hotelling duopoly," Economics Bulletin, AccessEcon, vol. 29(1), pages 338-346.
  2. Liu, Qihong & Serfes, Konstantinos, 2007. "Market segmentation and collusive behavior," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 25(2), pages 355-378, April.
  3. Yuncheol Jeong & Masayoshi Maruyama, 2009. "Commitment to a strategy of uniform pricing in a two-period duopoly with switching costs," Journal of Economics, Springer, Springer, vol. 98(1), pages 45-66, September.
  4. Jeanine Thal, 2005. "Optimal Collusion under Cost Asymmetry," Working Papers, Centre de Recherche en Economie et Statistique 2005-36, Centre de Recherche en Economie et Statistique.
  5. Hackner, Jonas, 1996. "Optimal symmetric punishments in a Bertrand differentiated products duopoly," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 14(5), pages 611-630, July.
  6. Aguirre, Inaki & Espinosa, Maria Paz & Macho-Stadler, Ines, 1998. "Strategic entry deterrence through spatial price discrimination," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 28(3), pages 297-314, May.
  7. Compte, Olivier & Jenny, Frederic & Rey, Patrick, 2002. "Capacity constraints, mergers and collusion," European Economic Review, Elsevier, Elsevier, vol. 46(1), pages 1-29, January.
  8. Stefano Colombo, 2011. "Discriminatory prices and the prisoner dilemma problem," The Annals of Regional Science, Springer, Springer, vol. 46(2), pages 397-416, April.
  9. Posada, Pedro & Straume, Odd Rune, 2002. "Merger, partial collusion and relocation," Working Papers in Economics, University of Bergen, Department of Economics 23/02, University of Bergen, Department of Economics.
  10. Qihong Liu & Konstantinos Serfes, 2004. "Quality of Information and Oligopolistic Price Discrimination," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 13(4), pages 671-702, December.
  11. Maria Paz Espinosa, 1992. "Delivered Pricing, FOB Pricing, and Collusion in Spatial Markets," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 64-85, Spring.
  12. David Encaoua & Abraham Hollander, 2007. "First-Degree Discrimination by a Duopoly: Pricing and Quality Choice," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00177604, HAL.
  13. Eber, Nicolas, 1997. "A note on the strategic choice of spatial price discrimination," Economics Letters, Elsevier, Elsevier, vol. 55(3), pages 419-423, September.
  14. Miklós-Thal, Jeanine, 2008. "Delivered pricing and the impact of spatial differentiation on cartel stability," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 26(6), pages 1365-1380, November.
  15. Colombo, Stefano, 2010. "Product differentiation, price discrimination and collusion," Research in Economics, Elsevier, Elsevier, vol. 64(1), pages 18-27, March.
  16. Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, Elsevier, vol. 39(1), pages 191-225, June.
  17. Hackner, Jonas, 1994. "Collusive pricing in markets for vertically differentiated products," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 12(2), pages 155-177, June.
  18. Fershtman, C. & Gandal, N., 1991. "Disadvantageous Semicollusion," Papers, Tel Aviv 37-91, Tel Aviv.
  19. Hackner, Jonas, 1995. "Endogenous product design in an infinitely repeated game," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 13(2), pages 277-299.
  20. 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.
  21. Lambertini, Luca & Poddar, Sougata & Sasaki, Dan, 2002. "Research joint ventures, product differentiation, and price collusion," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 20(6), pages 829-854, June.
  22. Motta,Massimo, 2004. "Competition Policy," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521016919.
  23. Armstrong, Mark, 2006. "Price discrimination," MPRA Paper 4693, University Library of Munich, Germany.
  24. Kenneth S. Corts, 1998. "Third-Degree Price Discrimination in Oligopoly: All-Out Competition and Strategic Commitment," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 306-323, Summer.
  25. Toshihiro Matsumura & Noriaki Matsushima, 2005. "Cartel Stability in a Delivered Pricing Oligopoly," Journal of Economics, Springer, Springer, vol. 86(3), pages 259-292, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Giuseppe Mastromatteo, 2011. "The Debate on the Crisis: Recent Reappraisals of the Concept of Functional Finance," DISCE - Quaderni dell'Istituto di Economia e Finanza, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) ief0105, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  2. Konovalov, Alexander, 2014. "Competition and Cooperation in Network Games," Working Papers in Economics, University of Gothenburg, Department of Economics 583, University of Gothenburg, Department of Economics.
  3. Sandro Brusco & Luca Colombo & Umberto Galmarini, 2010. "Local Governments Tax Autonomy, Lobbying, and Welfare," Department of Economics Working Papers, Stony Brook University, Department of Economics 10-01, Stony Brook University, Department of Economics.
  4. Giuseppe Mastromatteo, 2011. "H.P. Minsky And Policies To Countervail Crises," DISCE - Quaderni dell'Istituto di Economia e Finanza, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) ief0102, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ctc:serie3:ief0090. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Massimo Bordignon).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.