Transparency and Competition
AbstractThis paper examines the effects of search costs on prices in a Bertrand duopoly. It is shown that if the search cost is lowered, the expected price goes down in a single play of the stage game. However, if the game is repeated it may be easier to sustain collusion the lower the search cost. In other words increased transparency may facilitate collusion even if the sellers' information is unaffected. A transitory improvement of price transparency unambiguously leads to lower prices. Hence, the model provides theoretical support for the price publication practices of consumers' councils.
Download InfoIf 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.
Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 298.
Length: 22 pages
Date of creation: 04 Feb 1999
Date of revision: 29 Nov 1999
Contact details of provider:
Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
Web page: http://www.hhs.se/
More information through EDIRC
Bertrand Oligopoly; Collusion; Competition Policy; Imperfect Information; Transparency;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Boone, J. & Potters, J.J.M., 2002.
"Transparency, Prices and Welfare with Imperfect Substitutes,"
2002-7, Tilburg University, Center for Economic Research.
- Boone, J. & Potters, J.J.M., 2006. "Transparency, prices and welfare with imperfect substitutes," Open Access publications from Tilburg University urn:nbn:nl:ui:12-194307, Tilburg University.
- Boone, Jan & Potters, Jan, 2002. "Transparency, Prices and Welfare with Imperfect Substitutes," CEPR Discussion Papers 3256, C.E.P.R. Discussion Papers.
- KNAUFF, Malgorzata, 2006. "Market transparency and Bertrand competition," CORE Discussion Papers 2006037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Lommerud, Kjell Erik & Sorgard, Lars, 2003.
"Entry in telecommunication: customer loyalty, price sensitivity and access prices,"
Information Economics and Policy,
Elsevier, vol. 15(1), pages 55-72, March.
- Lommerud, Kjell Erik & Sørgard, Lars, 2002. "Entry in Telecommunication: Customer Loyalty, Price Sensitivity and Access Prices," CEPR Discussion Papers 3502, C.E.P.R. Discussion Papers.
- Lommerud, Kjell Erik & Sørgard, Lars, 2002. "Entry in Telecommunication: Customer Loyalty, Price Sensitivity and Access Prices," Working Papers in Economics 14/02, University of Bergen, Department of Economics.
- Rasch, Alexander & Herre, Jesko, 2013. "Customer-side transparency, elastic demand, and tacit collusion under differentiation," Information Economics and Policy, Elsevier, vol. 25(1), pages 51-59.
- Liliane Karlinger, 2008. "How Demand Information Can Destabilize a Cartel," Vienna Economics Papers 0803, University of Vienna, Department of Economics.
- Boone, Jan & Pottersz, Jan, 2006. "Transparency and prices with imperfect substitutes," Economics Letters, Elsevier, vol. 93(3), pages 398-404, December.
- Christian Schultz, 2002. "Transparency and Tacit Collusion in a Differentiated Market," CESifo Working Paper Series 730, CESifo Group Munich.
- Schultz, Christian, 2005. "Transparency on the consumer side and tacit collusion," European Economic Review, Elsevier, vol. 49(2), pages 279-297, February.
- Schultz, Christian, 2004.
"Market transparency and product differentiation,"
Elsevier, vol. 83(2), pages 173-178, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Lundin).
If references are entirely missing, you can add them using this form.