Partial collusion fosters minimum product differentiation
We investigate a spatial duopoly in which the firms simultaneously select locations at the beginning of time; once chosen, the locations are fixed forever, but the firms will choose prices in each of a countably infinite succession of time periods. We are interested in equilibrium behavior when the firms will collusively arrange a trigger strategy equilibrium in prices, and will select their locations knowing that a particular such trigger strategy price equilibrium will ensue. Specifically, we restrict our attention to prices that support an outcome on the profit possibility frontier at which the ratio of firm 1's profits to those of firm 2 is positively related to the similar ratio of profits at the single-shot noncooperative equilibrium. For these profit-sharing rules the resulting location equilibrium is unique and involves the pairing of firms at the market center.
(This abstract was borrowed from another version of this item.)
|Date of creation:|
|Note:||In : RAND Journal of Economics, 24 (4), 631-645, 1993|
|Contact details of provider:|| Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:cor:louvrp:1070. 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: (Alain GILLIS)
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.