Collusion, competition and piracy
AbstractIn this paper we analyze firms' ability to tacitly collude on pricesin an infinitely repeated duopoly game of vertical productdifferentiation. We show that firms collude if and only if their discountfactor is high enough, i.e. if they value future profits sufficiently. We alsoshow that a lower cost of copying facilitates collusion but that a higherquality of the copy hinders collusion. Thus, the overall effect of thesenew characteristics of copies made by consumers is ambiguous.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2009-20.
Length: 14 pages
Date of creation: Jan 2009
Date of revision:
Publication status: Published by Ivie
Collusion; competition; piracy; consumers; cost of copying;
Other versions of this item:
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-11 (All new papers)
- NEP-BEC-2009-09-11 (Business Economics)
- NEP-COM-2009-09-11 (Industrial Competition)
- NEP-IND-2009-09-11 (Industrial Organization)
- NEP-MIC-2009-09-11 (Microeconomics)
- NEP-REG-2009-09-11 (Regulation)
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