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Collusion, Agglomeration, and Heterogeneity of Firms

Toshihiro Matsumura and Noriaki Matsushima

No 2009-05, Discussion Papers from Kobe University, Graduate School of Business Administration

Abstract: Friedman and Thisse (RAND Journal of Economics, 1993) show that spatial agglomeration appears in a standard two-stage location price model if the symmetric firms can collude in prices. We introduce a cost difference between two firms. We show that agglomeration never appears in a collusive equilibrium even when the cost difference between the firms is sufficiently small.

Keywords: cost asymmetry; spatial agglomeration; collusion (search for similar items in EconPapers)
JEL-codes: L13 L41 R32 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2009-02
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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https://www.b.kobe-u.ac.jp/papers_files/2009_05.pdf First version, 2009 (application/pdf)

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Journal Article: Collusion, agglomeration, and heterogeneity of firms (2011) Downloads
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