Journal article
On the stability of multimarket collusion in price-setting supergames
International journal of industrial organization, v 30(2), pp 253-264
01 Mar 2012
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
In this paper we examine how trade liberalization affects collusive stability in the context of multimarket interactions. The model we consider is a segmented-markets duopoly with differentiated goods in which price-setting firms pool their incentive constraints across markets to sustain their most collusive outcome. We find that, when goods are very close substitutes and trade costs are sufficiently high, a marginal reduction in trade costs facilitates collusion. Exactly the opposite is true if, for any given degree of product substitutability, trade costs are sufficiently low. We also study the dependence of multimarket collusion on product differentiation. (C) 2011 Elsevier B.V. All rights reserved.
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Details
- Title
- On the stability of multimarket collusion in price-setting supergames
- Creators
- Osayi Akinbosoye - Online TechnologiesEric W. Bond - Vanderbilt UniversityConstantinos Syropoulos - Drexel University
- Publication Details
- International journal of industrial organization, v 30(2), pp 253-264
- Publisher
- Elsevier
- Number of pages
- 12
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000302515200012
- Scopus ID
- 2-s2.0-84858076294
- Other Identifier
- 991019169804104721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Economics