Collusive Market Sharing with Spatial Competition

Kai Andree () and Mike Schwan

Economics Bulletin, 2012, vol. 32, issue 4, 3357-3364

Abstract: This paper develops a spatial model to analyze the stability of a market sharing agreement between two firms. We find that the stability of the cartel depends on the relative market size of each firm. Collusion is not attractive for firms with a small home market, but the incentive for collusion increases when the firm's home market is getting larger relative to the home market of the competitor. The highest stability of a cartel and additionally the highest social welfare is found when regions are symmetric.

Keywords: Spatial Competition; Market Sharing; Collusion (search for similar items in EconPapers)
JEL-codes: D0 L0 (search for similar items in EconPapers)
Date: 2012-12-11
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Citations: View citations in EconPapers (1)

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Working Paper: Collusive market sharing with spatial competition (2012)
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