On the profitability of collusion in location games
AbstractIn this note we take a first step towards the analysis of collusion in markets with spatial competition, focusing on the case of pure location choices. We find that collusion can only be profitable if a coalition contains more than half of all players. This result holds for location games played in k-dimensional Euclidean space as long as consumers are distributed via atomless density functions. For competition on the unit interval, unit circle, and unit square we also derive sufficient conditions for collusion to be profitable. -- Wir untersuchen Kollusion in MÃ¤rkten, in denen die einzige strategische Variable der Akteure ihre Ortswahl ist. FÃ¼r Spiele in k-dimensionalen Euklidischen RÃ¤umen mit massepunktfreien Verteilungen zeigen wir, dass Kollusion nur profitabel sein kann, wenn wenigstens die HÃ¤lfte aller Akteure kolludieren. FÃ¼r Wettbewerb auf dem Einheitsintervall, dem Einheitskreis und dem Einheitsquadrat etablieren wir hinreichende Bedingungen fÃ¼r die ProfitabilitÃ¤t von Kollusion.
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 Tilburg University in its series Open Access publications from Tilburg University with number urn:nbn:nl:ui:12-123126.
Date of creation: 2003
Date of revision:
Publication status: Published in Journal of Urban Economics (2003) v.54, p.499-510
Contact details of provider:
Web page: http://www.tilburguniversity.edu/
Other versions of this item:
- Huck, Steffen & Knoblauch, Vicki & Muller, Wieland, 2003. "On the profitability of collusion in location games," Journal of Urban Economics, Elsevier, vol. 54(3), pages 499-510, November.
- Huck, Steffen & Knoblauch, Vicki & Müller, Wieland, 2002. "On the profitability of collusion in location games," Discussion Papers, Research Unit: Market Processes and Governance FS IV 02-22, Social Science Research Center Berlin (WZB).
- Huck, Steffen & Knoblauch, Vicki & Müller, Wieland, 2000. "On the profitability of collusion in location games," SFB 373 Discussion Papers 2000,23, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
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.:
- A Okabe & A Suzuki, 1987. "Stability of spatial competition for a large number of firms on a bounded two-dimensional space," Environment and Planning A, Pion Ltd, London, vol. 19(8), pages 1067-1082, August.
- Dasgupta, Partha & Maskin, Eric, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 1-26, January.
- Shaked, A, 1975. "Non-existence of Equilibrium for the Two-dimensional Three-firms Location Problem," Review of Economic Studies, Wiley Blackwell, vol. 42(1), pages 51-56, January.
- Dasgupta, Partha & Maskin, Eric, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, II: Applications," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 27-41, January.
- B.Curtis Eaton & Richard G. Lipsey, 1972.
"The Principle of Minimum Differentiation Reconsidered: Some New Developments in the Theory of Spatial Competition,"
87, Queen's University, Department of Economics.
- Eaton, B Curtis & Lipsey, Richard G, 1975. "The Principle of Minimum Differentiation Reconsidered: Some New Developments in the Theory of Spatial Competition," Review of Economic Studies, Wiley Blackwell, vol. 42(1), pages 27-49, January.
- Simon, Leo K, 1987. "Games with Discontinuous Payoffs," Review of Economic Studies, Wiley Blackwell, vol. 54(4), pages 569-97, October.
- Knoblauch, Vicki, 2002. "An Easy Proof That a Square Lattice Is an Equilibrium for Spatial Competition in the Plane," Journal of Urban Economics, Elsevier, vol. 51(1), pages 46-53, January.
- Shaked, A, 1982. "Existence and Computation of Mixed Strategy Nash Equilibrium for 3-Firms Location Problem," Journal of Industrial Economics, Wiley Blackwell, vol. 31(1-2), pages 93-96, September.
- Aoyagi, Masaki & Okabe, Atsuyuki, 1993. "Spatial competition of firms in a two-dimensional bounded market," Regional Science and Urban Economics, Elsevier, vol. 23(2), pages 259-289, April.
- Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 185-99, May.
- Huck, S. & Konrad, K.A. & Müller, W., 2005.
"Merger Without Costs Advantage,"
2005-019, Tilburg University, Tilburg Law and Economic Center.
- Daniel Strobach, 2006. "Competition between airports with an application to the state of Baden-Württemberg," Diskussionspapiere aus dem Institut fÃ¼r Volkswirtschaftslehre der UniversitÃ¤t Hohenheim 272/2006, Department of Economics, University of Hohenheim, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Economists Online Support).
If references are entirely missing, you can add them using this form.