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Pricing Policy and Partial Collusion

Stefano Colombo ()

No ief0090, DISCE - Quaderni dell'Istituto di Economia e Finanza from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE)

Abstract: We study the pricing policy equilibria emerging in a partial collusion duopolistic framework where firms in the first stage of the game choose non-cooperatively whether to price discriminate or not, and from the second stage onward collude on prices.When the discount factor is particularly high or particularly low both firms price discriminate in equilibrium. For intermediate discount factors and high firms'asymmetry, the unique equilibrium is characterized by only the smaller firm choosing price discrimination.In the case of intermediate discount factors and low firms'asymmetry, there are two possible equilibria: both firms price discriminate or no firm price discriminates.

Keywords: Partial Collusion; Pricing policy; Price discrimination (search for similar items in EconPapers)
JEL-codes: D43 L13 L40 (search for similar items in EconPapers)
Pages: 23
Date: 2009-10
New Economics Papers: this item is included in nep-com and nep-ind
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Journal Article: Pricing Policy and Partial Collusion (2011) Downloads
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