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Pricing Policy and Partial Collusion

  • Stefano Colombo

    ()

    (DISCE, Università Cattolica)

We study the pricing policy equilibria emerging in a partial collusion duopolistic framework where firms in the first stage of the game choose non-cooperatively whether to price discriminate or not, and from the second stage onward collude on prices.When the discount factor is particularly high or particularly low both firms price discriminate in equilibrium. For intermediate discount factors and high firms'asymmetry, the unique equilibrium is characterized by only the smaller firm choosing price discrimination.In the case of intermediate discount factors and low firms'asymmetry, there are two possible equilibria: both firms price discriminate or no firm price discriminates.

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File URL: http://www.unicatt.it/Istituti/EconomiaFinanza/Quaderni/ief0090.pdf
File Function: First version, 2009
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Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni dell'Istituto di Economia e Finanza with number ief0090.

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Length: 23
Date of creation: Oct 2009
Date of revision:
Handle: RePEc:ctc:serie3:ief0090
Contact details of provider: Web page: http://www.unicatt.it/Istituti/EconomiaFinanza
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  1. Miklos-Thal, Jeanine, 2008. "Optimal Collusion under Cost Asymmetry," MPRA Paper 11044, University Library of Munich, Germany.
  2. Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, vol. 39(1), pages 191-225, June.
  3. Posada, Pedro & Straume, Odd Rune, 2002. "Merger, partial collusion and relocation," Working Papers in Economics 23/02, University of Bergen, Department of Economics.
  4. Hackner, Jonas, 1994. "Collusive pricing in markets for vertically differentiated products," International Journal of Industrial Organization, Elsevier, vol. 12(2), pages 155-177, June.
  5. Liu, Qihong & Serfes, Konstantinos, 2007. "Market segmentation and collusive behavior," International Journal of Industrial Organization, Elsevier, vol. 25(2), pages 355-378, April.
  6. 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.
  7. Stefano Colombo, 2009. "Product differentiation, price discrimination and collusion," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0085, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  8. Aguirre, Inaki & Espinosa, Maria Paz & Macho-Stadler, Ines, 1998. "Strategic entry deterrence through spatial price discrimination," Regional Science and Urban Economics, Elsevier, vol. 28(3), pages 297-314, May.
  9. Kenneth S. Corts, 1998. "Third-Degree Price Discrimination in Oligopoly: All-Out Competition and Strategic Commitment," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 306-323, Summer.
  10. Qihong Liu & Konstantinos Serfes, 2002. "Quality of Information and Oligopolistic Price Discrimination," Industrial Organization 0203004, EconWPA, revised 06 Mar 2002.
  11. David Encaoua & Abraham Hollander, 2007. "First-Degree Discrimination by a Duopoly: Pricing and Quality Choice," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00177604, HAL.
  12. Stefano Colombo, 2011. "Discriminatory prices and the prisoner dilemma problem," The Annals of Regional Science, Springer, vol. 46(2), pages 397-416, April.
  13. Compte, Olivier & Jenny, Frederic & Rey, Patrick, 2002. "Capacity constraints, mergers and collusion," European Economic Review, Elsevier, vol. 46(1), pages 1-29, January.
  14. Yuncheol Jeong & Masayoshi Maruyama, 2009. "Commitment to a strategy of uniform pricing in a two-period duopoly with switching costs," Journal of Economics, Springer, vol. 98(1), pages 45-66, September.
  15. Lambertini, Luca & Poddar, Sougata & Sasaki, Dan, 2002. "Research joint ventures, product differentiation, and price collusion," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 829-854, June.
  16. Miklós-Thal, Jeanine, 2008. "Delivered pricing and the impact of spatial differentiation on cartel stability," International Journal of Industrial Organization, Elsevier, vol. 26(6), pages 1365-1380, November.
  17. Hackner, Jonas, 1995. "Endogenous product design in an infinitely repeated game," International Journal of Industrial Organization, Elsevier, vol. 13(2), pages 277-299.
  18. Fershtman, Chaim & Gandal, Neil, 1994. "Disadvantageous semicollusion," International Journal of Industrial Organization, Elsevier, vol. 12(2), pages 141-154, June.
  19. Toshihiro Matsumura & Noriaki Matsushima, 2005. "Cartel Stability in a Delivered Pricing Oligopoly," Journal of Economics, Springer, vol. 86(3), pages 259-292, December.
  20. repec:cup:cbooks:9780521016919 is not listed on IDEAS
  21. 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.
  22. Stefano Colombo, 2009. "Firms' symmetry and sustainability of collusion in a Hotelling duopoly," Economics Bulletin, AccessEcon, vol. 29(1), pages 338-346.
  23. Maria Paz Espinosa, 1992. "Delivered Pricing, FOB Pricing, and Collusion in Spatial Markets," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 64-85, Spring.
  24. Armstrong, Mark, 2006. "Price discrimination," MPRA Paper 4693, University Library of Munich, Germany.
  25. Eber, Nicolas, 1997. "A note on the strategic choice of spatial price discrimination," Economics Letters, Elsevier, vol. 55(3), pages 419-423, September.
  26. repec:cup:cbooks:9780521816632 is not listed on IDEAS
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