Competition and collusion with fixed output

Hans Zenger

Economics Letters, 2013, vol. 120, issue 2, 259-261

Abstract: In many industries, output is fixed by exogenous constraints, so firms compete by allocating a given stock of supplies between different markets. This paper shows that collusion in such industries leads firms to shift output from high-margin markets to low-margin markets. As a result, welfare is generally reduced although prices decrease in some markets and increase in others.

Keywords: Collusion; Fixed output; Price discrimination (search for similar items in EconPapers)
JEL-codes: L13 L41 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:2:p:259-261

DOI: 10.1016/j.econlet.2013.04.036

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