Exogenous Product Differentiation and the Stability of Collusion

Luca Lambertini ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: The stability of collusion in quantities in a differentiated duopoly is analised, and the result is compared to that emerging in the case of price-setting behaviour. It turns out that quantity collusion is generally better sustained than price collusion, unless products are almost perfect substitutes. Under both quantity and price competition, the social damage associated with collusion is increasing in the degree of substitutability.

Date: 1995-06
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:219

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