Collusive market sharing with spatial competition

  • This paper develops a spatial model to analyze the stability of a market sharing agreement between two firms. We find that the stability of the cartel depends on the relative market size of each firm. Collusion is not attractive for firms with a small home market, but the incentive for collusion increases when the firm’s home market is getting larger relative to the home market of the competitor. The highest stability of a cartel and additionally the highest social welfare is found when regions are symmetric. Further we can show that a monetary transfer can stabilize the market sharing agreement.

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Metadaten
Author:Kai Andree, Mike Schwan
URN:urn:nbn:de:kobv:517-opus-62146
Series (Serial Number):Volkswirtschaftliche Diskussionsbeiträge (Bd. 105)
Document Type:Book
Language:English
Date of Publication (online):2012/10/30
Year of Completion:2012
Publishing Institution:Universität Potsdam
Release Date:2012/10/30
RVK - Regensburg Classification:QD 100
Organizational units:Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoKeine Nutzungslizenz vergeben - es gilt das deutsche Urheberrecht