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Competition, collusion and spatial sales patterns – theory and evidence

Author

Listed:
  • Matthias Hunold

    (University of Siegen = Universität Siegen [Siegen])

  • Kai Hüschelrath

    (Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - University of Mannheim = Universität Mannheim)

  • Ulrich Laitenberger

    (Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - University of Mannheim = Universität Mannheim, SES - Département Sciences Economiques et Sociales - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris, ECOGE - Economie Gestion - I3 SES - Institut interdisciplinaire de l’innovation de Telecom Paris - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Johannes Muthers

    (JKU - University of Linz - Johannes Kepler Universität Linz)

Abstract

This article studies competition in markets with transport costs and capacity constraints. Using a rich micro-level data set of the cement industry in Germany, we study a cartel breakdown to identify the effect of competition on transport distances. We find that when firms compete, they more often serve more distant customers. Moreover, the transport distance also varies in the ratio of capacity relative to demand, but only if firms compete and not when they coordinate their sales. We provide a theoretical model of spatial competition with capacity constraints that rationalizes the empirical results.

Suggested Citation

  • Matthias Hunold & Kai Hüschelrath & Ulrich Laitenberger & Johannes Muthers, 2020. "Competition, collusion and spatial sales patterns – theory and evidence," Post-Print hal-02436944, HAL.
    • Handle: RePEc:hal:journl:hal-02436944
    DOI: 10.1111/joie.12237
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    Cited by:

    1. Hunold, Matthias & Muthers, Johannes, 2019. "Spatial competition and price discrimination with capacity constraints," International Journal of Industrial Organization, Elsevier, vol. 67(C).
    2. Hunold, Matthias & Muthers, Johannes, 2018. "Spatial Competition with Capacity Constraints and Subcontracting," DICE Discussion Papers 254, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE), revised 2018.

    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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