EconPapers    
Economics at your fingertips  
 

Is the French mobile phone cartel really a cartel?

Louis de Mesnard ()

No 2009-02, LEG - Document de travail - Economie from LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne

Abstract: France Telecom (FT), SFR and Bouygues Telecom (BT) have been fined by France’s Conseil de la Concurrence (CC) for organizing a mobile phone cartel with stable market shares (one-half, one-third and one-sixth respectively) and for directly exchanging commercial information. While not contesting the legal decision, it is argued here that the economic reasoning is flawed. 1) As the CC made much of the firms’ stable market shares, we have first followed this line of reasoning by considering that the market shares are quotas under uniform costs. Even if there is a general incentive to form a monopolistic cartel, BT was too small for it to be worth its while to join it; it is not necessary to exchange information directly to coordinate market shares and prices effectively; all partial cartels are unlikely. 2) We then considered that the non-uniform market shares are explained by the costs in Cournot competition which can be deduced from the observed market shares by assuming that the costs are kept the same when switching from Cournot competition to any form of cartel. We deduced that market shares cannot be other than stable and non-uniform; any monopoly is unlikely to come about, because FT has negative incentives to form a monopolistic cartel; no partial cartels of two operators are viable because at least one member would lose out. The paper also shows that Stackelberg competition is unlikely as well as Bertrand-Edgeworth competition. In conclusion, Cournot competition is the only arrangement that guarantees no losses to all operators.

Keywords: Cartel; Mobile phone; Mobile telephony; GSM; Conseil de la Concurrence; ARCEP; Cournot; Stackelberg (search for similar items in EconPapers)
JEL-codes: D43 K21 L13 L41 L96 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://leg.u-bourgogne.fr/images/stories/pdf/doc_trav2009/e2009-02.pdf
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to leg.u-bourgogne.fr:80 (No such host is known. )

Related works:
Journal Article: Is the French mobile phone cartel really a cartel? (2009) Downloads
Working Paper: Is the French mobile phone cartel really a cartel? (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lat:legeco:e2009-02

Access Statistics for this paper

More papers in LEG - Document de travail - Economie from LEG, Laboratoire d'Economie et de Gestion, CNRS, Université de Bourgogne Pôle d'Economie et de Gestion - 2, bd Gabriel - BP 26611 - F-21066 Dijon cedex - France. Contact information at EDIRC.
Bibliographic data for series maintained by Odile Ferry ( this e-mail address is bad, please contact ).

 
Page updated 2022-01-15
Handle: RePEc:lat:legeco:e2009-02