EconPapers    
Economics at your fingertips  
 

Cooperative pricing in spatially differentiated markets

Matthias Firgo and Agnes Kügler

Regional Science and Urban Economics, 2018, vol. 73, issue C, 51-67

Abstract: The empirical literature on mergers, market power and cooperation in differentiated markets has mainly focused on methods relying on output and/or panel data. In contrast to this literature we propose an approach to analyze cooperative behavior among a group of firms only by making use of information on the spatial structure of a horizontally differentiated market. Using spatial econometrics techniques we focus on differences in the pricing behavior between different groups of firms, i.e. alliance and stand-alone firms. We apply this method to the market for ski lift tickets using a unique data set on ticket prices and detailed resort-specific characteristics covering all ski resorts in Austria. We show that prices of ski resorts forming alliances are higher and increase with the size and towards the spatial center of an alliance. Interaction in pricing is higher within than outside alliances. All results are in line with the findings of theoretical models on non-competitive pricing behavior in horizontally differentiated markets.

Keywords: Strategic alliances; Cooperation; Collusion; Spatial differentiation; Ski lift ticket prices (search for similar items in EconPapers)
JEL-codes: C21 D43 L11 L41 L83 R32 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0166046216303568
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:73:y:2018:i:c:p:51-67

Access Statistics for this article

Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou

More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-04-14
Handle: RePEc:eee:regeco:v:73:y:2018:i:c:p:51-67