Intertemporal Product Choice and Its Effects on Collusive Firm Behavior

Myong-Hun Chang ()

International Economic Review, 1992, vol. 33, issue 4, 773-93

Abstract: This study analyzes the collusive behavior of firms in markets characterized by horizontal product differentiation. The special features are that product choice is endogenized and that firms may redesign their products intertemporally at a fixed cost. The main objective is to examine the relationships between the extent of product differentiation, the product redesigning cost, and the degree of collusion supportable. The findings indicate that flexible product design makes collusion more difficult to sustain since, in the event collusion breaks down, firms have an incentive to mitigate the severity of punishment by redesigning their products and, thus, reducing price competition. Copyright 1992 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (39)

Downloads: (external link)
http://links.jstor.org/sici?sici=0020-6598%2819921 ... O%3B2-D&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:ier:iecrev:v:33:y:1992:i:4:p:773-93

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Harold L. Cole

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and ().