Market Segmentation, Market Integration and Tacit Collusion

Constantin Colonescu and Nicolas Schmitt

No 166, CESifo Working Paper Series from CESifo

Abstract: This paper shows that moving from market segmentation to market integration (i.e. firms can no longer discriminate among markets) may have anti-competitive effects in a repeated game setting in which a simple trigger strategy is the enforcement strategy. In particular, we show that two countries can never both experience pro-competitive gains and that two similar countries always both experience anti-competitive effects from market integration. We show that the same conclusions hold when trade liberalization is understood as being a decrease in bilateral barriers to trade followed by the switch from market segmentation to market integration.

Keywords: International Trade; Trade Policy; Imperfect Competition; Collusion; Trade Liberalization (search for similar items in EconPapers)
Date: 1998
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Related works:
Journal Article: Market Segmentation, Market Integration, and Tacit Collusion (2003)
Working Paper: Market Segmentation, Market Integration and Tacit Collusion (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_166

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