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Cost-based access regulation and collusion in a differentiated duopoly

Author

Listed:
  • Edmond Baranes

    (CREDEN - Centre de Recherche en Economie et Droit de l'ENergie - UM1 - Université Montpellier 1)

  • Jean-Christophe Poudou

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Edmond Baranes & Jean-Christophe Poudou, 2010. "Cost-based access regulation and collusion in a differentiated duopoly," Post-Print hal-01811005, HAL.
    • Handle: RePEc:hal:journl:hal-01811005
    DOI: 10.1016/j.econlet.2009.11.012
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    References listed on IDEAS

    as
    1. Behringer, Stefan, 2009. "Entry, access pricing, and welfare in the telecommunications industry," Economics Letters, Elsevier, vol. 102(3), pages 185-188, March.
    2. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(1), pages 1-12.
    3. Rothschild, R., 1992. "On the sustainability of collusion in differentiated duopolies," Economics Letters, Elsevier, vol. 40(1), pages 33-37, September.
    4. Berger, Ulrich, 2005. "Bill-and-keep vs. cost-based access pricing revisited," Economics Letters, Elsevier, vol. 86(1), pages 107-112, January.
    5. David R. Collie, 2006. "Collusion in Differentiated Duopolies with Quadratic Costs," Bulletin of Economic Research, Wiley Blackwell, vol. 58(2), pages 151-159, April.
    6. Deneckere, R., 1983. "Duopoly supergames with product differentiation," Economics Letters, Elsevier, vol. 11(1-2), pages 37-42.
    7. 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.
    8. David Collie, 2004. "Collusion and the elasticity of demand," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-6.
    9. Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
    10. Armstrong, Mark & Sappington, David E.M., 2007. "Recent Developments in the Theory of Regulation," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 27, pages 1557-1700, Elsevier.
    11. repec:ebl:ecbull:v:12:y:2004:i:3:p:1-6 is not listed on IDEAS
    12. Paul Klemperer, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 375-394.
    13. 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.
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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. repec:ipg:wpaper:2014-580 is not listed on IDEAS
    4. 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.
    5. 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.

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