Collusion, competition and piracy
In this article we analyse firms' ability to tacitly collude on prices in an infinitely repeated duopoly game of vertical product differentiation. We show that firms collude if and only if their discount factor is high enough, that is, if they value future profits sufficiently. We also show that a lower cost of copying facilitates collusion but that a higher quality of the copy hinders collusion. Thus, the overall effect of these new characteristics of copies made by consumers is ambiguous.
Volume (Year): 18 (2011)
Issue (Month): 11 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEL20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEL20|
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.:
- Bae, Sang Hoo & Choi, Jay Pil, 2006. "A model of piracy," Information Economics and Policy, Elsevier, vol. 18(3), pages 303-320, September.
- Paul Belleflamme & Pierre M. Picard, 2007.
"Piracy and Competition,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 16(2), pages 351-383, 06.
- BELLEFLAMME, Paul & PICARD, Pierre M., "undated". "Piracy and competition," CORE Discussion Papers RP 1919, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Paul Belleflamme & Pierre M. Picard, 2004. "Piracy and Competition," CESifo Working Paper Series 1350, CESifo Group Munich.
- BELLEFLAMME, Paul & PICARD, Pierre, 2005. "Piracy and competition," CORE Discussion Papers 2005083, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Paul, BELLEFLAMME & Pierre, PICARD, 2005. "Piracy and competition," Discussion Papers (ECON - Département des Sciences Economiques) 2005057, Université catholique de Louvain, Département des Sciences Economiques.
- Schultz, Christian, 2005. "Transparency on the consumer side and tacit collusion," European Economic Review, Elsevier, vol. 49(2), pages 279-297, February.
- James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
- Francisco Martínez-Sánchez, 2007. "Why Does The Pirate Decide To Be The Leader In Prices?," Working Papers. Serie AD 2007-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Hackner, Jonas, 1996. "Optimal symmetric punishments in a Bertrand differentiated products duopoly," International Journal of Industrial Organization, Elsevier, vol. 14(5), pages 611-630, July.
- Chang, Myong-Hun, 1991. "The effects of product differentiation on collusive pricing," International Journal of Industrial Organization, Elsevier, vol. 9(3), pages 453-469, September.
- Peitz, Martin & Waelbroeck, Patrick, 2006. "Piracy of digital products: A critical review of the theoretical literature," Information Economics and Policy, Elsevier, vol. 18(4), pages 449-476, November.
- Nikolaos Georgantzis & Carlos Gutiérrez-Hita, 2008. "Service provision on a network with endogenous consumption capacity," Working Papers. Serie AD 2008-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Francisco Martinez, 2008. "Learning by Copying," ThE Papers 08/05, Department of Economic Theory and Economic History of the University of Granada..
- repec:ebl:ecbull:v:6:y:2003:i:10:p:1-9 is not listed on IDEAS
- Liu, Qihong & Serfes, Konstantinos, 2007. "Market segmentation and collusive behavior," International Journal of Industrial Organization, Elsevier, vol. 25(2), pages 355-378, April.
- Hackner, Jonas, 1994. "Collusive pricing in markets for vertically differentiated products," International Journal of Industrial Organization, Elsevier, vol. 12(2), pages 155-177, June.
- Iturbe-Ormaetxe, Iñigo & Ponti, Giovanni & Tomás, Josefa & Ubeda, Luis, 2011. "Framing effects in public goods: Prospect Theory and experimental evidence," Games and Economic Behavior, Elsevier, vol. 72(2), pages 439-447, June.
- Iñigo Iturbe Ormaetxe & Giovanni Ponti & Josefa Tomás & Luis Ubeda, 2008. "Framing Effects in Public Goods: Prospect Theory and Experimental Evidence," Working Papers. Serie AD 2008-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:18:y:2011:i:11:p:1043-1047. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.