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Collusion in Spatially Separated Markets with Quantity Competition

Kai Andree ()

Journal of Industry, Competition and Trade, 2013, vol. 13, issue 3, 309-318

Abstract: This paper develops the incentives to collude in a model with spatially separated markets and quantity setting firms. We find that increases in transportation costs stabilize the collusive agreement. We also show that, the higher the demand in both markets the less likely will collusion be sustained. Gross and Holahan (Int Econ Rev 44:299–312, 2003 ) use a similar model with price setting firms, we compare their results with ours to analyze the impact of the mode of competition on sustainability of collusion. Further we analyze the impact of collusion on social welfare and find that collusion may be welfare enhancing. Copyright Springer Science+Business Media New York 2013

Keywords: collusion; spatial competition; duopoly; L10; R10; D43 (search for similar items in EconPapers)
Date: 2013
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Working Paper: Collusion in spatially separated markets with quantity competition (2011) Downloads
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