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Cost-based access regulation and collusion in a differentiated duopoly

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  • Baranes, Edmond
  • Poudou, Jean-Christophe

Abstract

This paper revisits the conventional doctrine that "it is easier to collude among equals", applied in the context of vertically related markets. In a differentiated duopoly model, we study how cost-based access price regulation may hinder the sustainability of tacit collusion.

Suggested Citation

  • Baranes, Edmond & Poudou, Jean-Christophe, 2010. "Cost-based access regulation and collusion in a differentiated duopoly," Economics Letters, Elsevier, vol. 106(3), pages 172-176, March.
  • Handle: RePEc:eee:ecolet:v:106:y:2010:i:3:p:172-176
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    References listed on IDEAS

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    1. Deneckere, R., 1983. "Duopoly supergames with product differentiation," Economics Letters, Elsevier, vol. 11(1-2), pages 37-42.
    2. Shy, Oz, 2002. "A quick-and-easy method for estimating switching costs," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 71-87, January.
    3. Behringer, Stefan, 2009. "Entry, access pricing, and welfare in the telecommunications industry," Economics Letters, Elsevier, vol. 102(3), pages 185-188, March.
    4. Paul Klemperer, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 375-394.
    5. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
    6. Rothschild, R., 1992. "On the sustainability of collusion in differentiated duopolies," Economics Letters, Elsevier, vol. 40(1), pages 33-37, September.
    7. Armstrong, Mark & Sappington, David E.M., 2007. "Recent Developments in the Theory of Regulation," Handbook of Industrial Organization, Elsevier.
    8. David Collie, 2004. "Collusion and the elasticity of demand," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-6.
    9. Berger, Ulrich, 2005. "Bill-and-keep vs. cost-based access pricing revisited," Economics Letters, Elsevier, vol. 86(1), pages 107-112, January.
    10. Ivaldi, Marc & Jullien, Bruno & Rey, Patrick & Seabright, Paul & Tirole, Jean, 2003. "The Economics of Tacit Collusion," IDEI Working Papers 186, Institut d'Économie Industrielle (IDEI), Toulouse.
    11. Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
    12. David R. Collie, 2006. "Collusion in Differentiated Duopolies with Quadratic Costs," Bulletin of Economic Research, Wiley Blackwell, vol. 58(2), pages 151-159, April.
    13. repec:ebl:ecbull:v:12:y:2004:i:3:p:1-6 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Edmond Baranes & Stefan Behringer & Jean-Christophe Poudou, 2017. "Mobile Access Charges and Collusion under Asymmetry," Annals of Economics and Statistics, GENES, issue 127, pages 33-60.
    2. Stefano Colombo, 2013. "Differentiated Bertrand markets: restoring the minimum differentiation principle," Letters in Spatial and Resource Sciences, Springer, vol. 6(2), pages 103-108, July.
    3. Sami Debbichi & Walid Hichri, 2014. "Market Power and Collusion on Interconnection Phone Market in Tunisia : What Lessons from International Experiences," Working Papers halshs-00956638, HAL.
    4. repec:ipg:wpaper:2014-580 is not listed on IDEAS
    5. Sami Debbichi & Walid Hichri, 2013. "Threshold of Preference for Collusion and Interconnection Fees in Different Market Structures : the Tunisian Mobile Market Case," Working Papers 1307, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.

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