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Competition, collusion and spatial sales patterns: Theory and evidence

Matthias Hunold, Kai Hüschelrath, Ulrich Laitenberger and Johannes Muthers ()
Authors registered in the RePEc Author Service: Kai Hueschelrath

No 302, DICE Discussion Papers from University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: This article studies competition in markets with transport costs and capacity constraints. We compare the outcomes of price competition and coordination in a theoretical model and find that when firms compete, they more often serve more distant customers who are closer to the competitor's plant. If firms compete, the transport distance also varies in the degree of overcapacity, but not if they coordinate their sales. Using a rich micro-level data set of the cement industry in Germany, we study a cartel breakdown to identify the effect of competition on transport distances. Our econometric analyses support the theoretical predictions.

Keywords: capacity constraints; cartel; cement; spatial competition; transport costs (search for similar items in EconPapers)
JEL-codes: K21 L11 L41 L61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind, nep-law and nep-tre
Date: 2018
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Working Paper: Competition, collusion and spatial sales patterns: Theory and evidence (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:302

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