Let's lock them in: Collusion under Consumer Switching Costs

Niklas Fourberg

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: I study consumer switching costs’ effect on firms’ price setting behavior in a 2x2 factorial design experiment with and without communication. For Bertrand duopolies the price level under consumer switching costs is lower vis-à-vis new consumers but not affected towards old consumers. Markets are overall less tacitly collusive which translates into higher incentives to collude explicitly. The results have antitrust implications especially for the focus of cartel screening.

JEL-codes: C7 C9 L13 L41 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-com, nep-cta, nep-exp and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168097

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