Does price discrimination make collusion less likely? a delivered pricing model

John Heywood, Dongyang Li and Guangliang Ye
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Dongyang Li: Renmin University of China

Journal of Economics, 2020, vol. 131, issue 1, No 2, 39-60

Abstract: Abstract This paper compares the stability of collusion under delivered spatial price discrimination and under uniform pricing. Uniquely using a model of elastic demand, we show that collusion under price discrimination can be more stable thus facilitating collusion and making it more likely. This result holds only when the entire market is competitive. Whenever there exist natural monopoly portions of the spatial market, collusion on the remaining market is less stable with spatial price discrimination making such collusion less likely relative to uniform pricing.

Keywords: Uniform pricing; Spatial price discrimination; Collusion stability (search for similar items in EconPapers)
JEL-codes: L13 L41 R32 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:131:y:2020:i:1:d:10.1007_s00712-020-00699-4

DOI: 10.1007/s00712-020-00699-4

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