Competition, collusion and spatial sales patterns: Theory and evidence

Matthias Hunold, Kai Hüschelrath, Ulrich Laitenberger and Johannes Muthers

No 302, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: This article studies competition in markets with transport costs and capacity constraints. We compare the outcomes of price competition and coordination in a theoretical model and find that when firms compete, they more often serve more distant customers who are closer to the competitor's plant. If firms compete, the transport distance also varies in the degree of overcapacity, but not if they coordinate their sales. 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. Our econometric analyses support the theoretical predictions.

Keywords: capacity constraints; cartel; cement; spatial competition; transport costs (search for similar items in EconPapers)
JEL-codes: K21 L11 L41 L61 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-com, nep-ind, nep-law and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Competition, Collusion, and Spatial Sales Patterns: Theory and Evidence (2020)
Working Paper: Competition, collusion and spatial sales patterns – theory and evidence (2020)
Working Paper: Competition, collusion and spatial sales patterns: Theory and evidence (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:302

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