Autore: Boehnlein, Barbara
Titolo: The impact of product differentiation on collusive equilibria and multimarket contact
Periodico: European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1993 - Fascicolo: 38 - Pagina iniziale: 1 - Pagina finale: 20

When two firms play an infinite time horizon game with trigger price strategies, the collusive equilibrium is sustainable provided the discount factor is relatively close to 1. In this paper I show that, when products are differentiated, firms can always sustain some degree of collusion for whatever value of the discount factor. This result is fairly general since it does not depend on the way product differentiation is modelled. I then examine under which conditions the introduction of multimarket contact can increase the degree of collusion in these games. Here, the outcome depends on whether a spatial or a quadratic utility model is used to model product differentiation. It seems that a spatial model leaves more room to firms to increase the degree of collusion, at least when the number of competitors is sufficiently small.




Testo completo: http://hdl.handle.net/1814/479

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