Collusive Stability with Relative Performance and Network Externalities

Yi-Shan Lu, Chien-Shu Tsai, Jen-Yao Lee and Chung-Yang Lee ()
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Yi-Shan Lu: Department of Logistics Management, Guangdong University of Science and Technology, Dongguan 523083, China
Chien-Shu Tsai: Institute of Marine Affairs and Business Management, National Kaohsiung University of Science and Technology, Kaohsiung 811213, Taiwan
Jen-Yao Lee: Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 807618, Taiwan
Chung-Yang Lee: Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 807618, Taiwan

Games, 2024, vol. 15, issue 3, 1-7

Abstract: In this paper, we aim to investigate the collusive stability in the presence of network externalities among firms with relative performance in the firm’s objective functions. We demonstrate that collusive stability is increasing (decreasing) in the degree of relative performance, product substitutability and network effect when the network effect is sufficiently large (small). A competition agency might need to provide different guidance for anti-competitive regulation in the network industry.

Keywords: relative performance; network externalities; stability of collusion (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2024
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