Tacit collusion and its welfare effect in a network product market
Economics Bulletin, 2018, vol. 38, issue 4, 1787-1795
Based on a horizontally differentiated duopoly model with network externalities, and focusing on the role of compatibility between products, we demonstrate the conditions under which collusive behavior improves social welfare. In particular, if the degree of a network compatibility effect upgraded by collusive agreement is sufficiently large, collusion increases consumer surplus compared with noncooperative Cournot competition.
Keywords: collusion; network externality; compatibility; horizontally differentiated Cournot duopoly; welfare (search for similar items in EconPapers)
JEL-codes: L1 L2 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-18-00435
Access Statistics for this article
More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().