Detecting Collusion in Spatially Differentiated Markets

Matthias Firgo and Agnes Kügler

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: The empirical literature on mergers, market power and collusion in differentiated markets has mainly focused on methods relying on output and/or panel data. In contrast to this literature we suggest a novel approach that allows for the detection of collusive behavior among a group of firms making use of information on the spatial structure of horizontally differentiated products. By estimating best response functions using a spatial econometrics approach, we focus on differences in the strategic interaction in pricing between different groups of firms as well as on differences in price levels. We apply our method to the market for ski lift tickets using a unique data set on ticket prices and detailed resort-specific characteristics covering all ski resorts in Austria.

Keywords: tacit collusion; strategic alliances; spatial differentiation; ski lift ticket prices (search for similar items in EconPapers)
JEL-codes: C21 D43 L11 L41 L83 R32 (search for similar items in EconPapers)
Date: 2014-10
New Economics Papers: this item is included in nep-com, nep-geo, nep-ind and nep-ure
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Detecting Collusion in Spatially Differentiated Markets (2014)
Working Paper: Detecting Collusion in Spatially Differentiated Markets (2014)
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