Collusion in a differentiated duopoly with network externalities

Ruichao Song and Leonard F.S. Wang

Economics Letters, 2017, vol. 152, issue C, 23-26

Abstract: Conventional wisdom is that collusion between firms will be destabilized when they produce closer substitutes of products. We show that, in the presence of strong network externalities, this result no longer holds, and collusion becomes more sustainable for closer substitutes of products under relatively strong network externalities.

Keywords: Network externalities; Differentiated duopoly; Stability of collusion (search for similar items in EconPapers)
JEL-codes: L13 L41 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:152:y:2017:i:c:p:23-26

DOI: 10.1016/j.econlet.2016.12.032

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