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.
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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
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Publication status: Published in Journal of Urban Economics (2003) v.54, p.499-510
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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, 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.
- 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).
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