Collusive Conduct in Duopolies: Multimarket Contact and Cross-Ownership in the Mobile Telephone Industry

Parker, Philip M.; Röller, Lars‐Hendrik

doi:10.2307/2555807

Cited by 310 publications

(188 citation statements)

References 21 publications

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“…In particular, Evans and Kessides (1994) and Gimeno andWoo (1996, 1999) observed that collusive pricing is associated with multimarket contacts in the US airline industry. Parker and Röller (1997) and Busse (2000) found collusive behaviour in the US cellular telephone industry due to interdependency. Fernandez and Marrin (1998) showed effects of multimarket contracts on prices in the Spanish hotel industry and Jans and Rosenbaum (1997) in the US cement industry, respectively.…”

Section: Introductionmentioning

confidence: 99%

Testing Forbearance Experimentally: Duopolistic Competition of Conglomerate Firms

Güth

Häger

Kirchkamp³

et al. 2015

International Journal of the Economics of Business

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Like Feinberg and Sherman (1985) and Phillips and Mason (1992), we test experimentally whether conglomerate firms, i.e. firms competing on multiple, structurally unrelated markets, effectively limit competition. Unlike these authors, our more general analysis assumes differentiated rather than homogeneous products and distinguishes strategic substitutes as well as complements to test their forbearance hypothesis. We vary the duration of the interaction to disentangle effects of forbearance and repetition. Surprisingly, rather than limiting competition, conglomerate firms foster it. In line with our expectations, we find more cooperation with strategic complements than with strategic substitutes and also more cooperation with long term than with short term interaction.

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Section: Introductionmentioning

confidence: 99%

Testing Forbearance Experimentally: Duopolistic Competition of Conglomerate Firms

Güth

Häger

Kirchkamp³

et al. 2015

International Journal of the Economics of Business

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“…Collocation has a particular effect on product variety; the smaller and differentiated product variety in collocated stores implies that they attempt to forbear from aggression and engage in coordinated interaction. We find evidence of mutual forbearance or coordinated interaction in prior studies that concentrate on pricing (Parker & Röller 1997), market entry, growth, and market exit (Baum & Korn 1996;Haveman & Nonnemaker, 2000), but no prior work documents these concepts along product variety dimensions.…”

Section: Contributions and Future Research Directionsmentioning

confidence: 60%

Managing Product Variety and Collocation in a Competitive Environment: An Empirical Investigation of Consumer Electronics Retailing

Ren

et al. 2011

Management Science

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Product variety is an important strategic tool that firms can use to attract customers and respond to competition. This study focuses on the retail industry and investigates how stores manage their product variety, contingent on the presence of competition and their actual distance from rivals.Using a unique data set that contains all Best Buy and Circuit City stores in the United States, the authors find that a store's product variety (i.e., number of stock-keeping units) increases if a rival store exists in its market but, in the presence of such competition, decreases when the rival store is collocated (within one mile of the focal store). Moreover, collocated rival stores tend to differentiate themselves by overlapping less in product range than do non-collocated rivals. This smaller and more differentiated product variety may be due to coordinated interactions between collocated stores. In summary, this article presents evidence of both coordination and competition in retailers' use of product variety.

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“…Second, since the methodology is based on a multimarket model, the analysis is expected to be useful for application to certain contexts where illegal agreements on prices are more likely. This idea is supported by recent studies, which show that firms' contact in multiple markets may enhance abilities to collude (Gupta, 2001;Parker & Röller, 1997).…”

Section: Introductionmentioning

confidence: 68%

Testing price-fixing agreements in a multimarket context: The European case of vitamin C

Balaguer

Orts

Uriel

2007

International Review of Law and Economics

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In this paper, we suggest a method to test price-fixing agreements. Prices fixed to multiple shipments are decomposed into a set of destination market effects and time effects in order to allow us to perform an analysis of residuals. We examine the pricing behavior of vitamin C in the European destination markets of German exports. We explore two different periods: January 1991-August 1995 and September 1995-September 2001. Empirical results on the first period, which are consistent with our knowledge obtained from firms' confessions about illegal agreements, contrast notably with those obtained on the more recent period.

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Collusive Conduct in Duopolies: Multimarket Contact and Cross-Ownership in the Mobile Telephone Industry

Cited by 310 publications

References 21 publications

Testing Forbearance Experimentally: Duopolistic Competition of Conglomerate Firms

Testing Forbearance Experimentally: Duopolistic Competition of Conglomerate Firms

Managing Product Variety and Collocation in a Competitive Environment: An Empirical Investigation of Consumer Electronics Retailing

Testing price-fixing agreements in a multimarket context: The European case of vitamin C

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