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.
Author details: | Kai Andree, Mike Schwan |
---|---|
URN: | urn:nbn:de:kobv:517-opus-62146 |
Publication series (Volume number): | Volkswirtschaftliche Diskussionsbeiträge (105) |
Publication type: | Working Paper |
Language: | English |
Publication year: | 2012 |
Publishing institution: | Universität Potsdam |
Release date: | 2012/10/30 |
RVK - Regensburg classification: | QD 100 |
Organizational units: | Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften |
DDC classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
License (German): | Keine öffentliche Lizenz: Unter Urheberrechtsschutz |