Collusive outcomes in price competition

Dastidar, Krishnendu Ghosh

doi:10.1007/bf02339582

Cited by 25 publications

(26 citation statements)

References 9 publications

(7 reference statements)

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“…This result is also in line with Dastidar (2001) showing that if the second derivative of the cost function is non-increasing in output, it is easier to sustain collusion when the number of firms increases. Indeed, our cost function meets such condition.…”

Section: Price Competition and Convex Costssupporting

confidence: 88%

A Single Espresso, Please! Rationalizing Espresso Price Dispersion Across Italian Cities

et al. 2017

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This paper aims at providing an explanation of the observed espresso price dispersion across major Italian cities. We present some preliminary empirical evidence that suggests a positive relationships between the average espresso price in a city and the number of coffee shops (normalized for the adult population) operating in that city. The finding is shown to be robust after controlling for GDP per capita and consumers' price index. We provide an interpretation of the empirical findings relying on a model of price competition where firms adjust the mark-up to offset the negative effect of any increase in their number.

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Section: Price Competition and Convex Costssupporting

confidence: 88%

A Single Espresso, Please! Rationalizing Espresso Price Dispersion Across Italian Cities

et al. 2017

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“…Moreover, some studies focus on a collusive price to narrow the set of Nash equilibria (e.g. Dastidar, 2001;Gori et al, 2014). This criterion is also similar to that in our approach.…”

Section: Modelmentioning

confidence: 89%

Optimal Export Policy With Upstream Price Competition

Mizuno

Takauchi

2019

The Manchester School

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We present a third‐market model with a vertical trading structure, in which upstream input suppliers engage in homogeneous price competition. We show that, under downstream Bertrand competition, a non‐monotonic export policy may result. Specifically, the optimal policy of the exporting country can turn into a tax–subsidy–tax as the degree of product substitutability rises. We also confirm the conventional result for which the optimal policy is an export subsidy (tax) if there is Cournot (Bertrand) competition downstream, provided that the number of domestic suppliers is at an intermediate level. We further discuss bilateral policy interventions when both exporting countries offer a subsidy/tax to their domestic downstream firms. We show that a non‐monotonic export policy (tax–subsidy–tax) can arise even in this extended setting.

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“…It is notable that the critical value of the relative slope of the marginal cost curve required for this result, * ¼ 0.226, seems quite low. The difference between the Bertrand and the Cournot critical discount factors as a function of the degree of product substitutability and the relative slope of the marginal cost curve is shown in Figure 2 3 In contrast to Proposition 1, Dastidar (2001) shows that collusion can be sustained in single-shot Bertrand oligopoly with homogeneous products when the cost function is convex, whereas it cannot be sustained in a single-shot Cournot oligopoly.…”

Section: Bulletin Of Economic Researchmentioning

confidence: 89%

Collusion in Differentiated Duopolies with Quadratic Costs

Collie

2006

Bulletin of Econ Res

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The analysis of collusion in infinitely repeated duopoly games has generally assumed that marginal cost is constant, but this note uses quadratic costs (linear marginal costs) to compare the sustainability of collusion under Bertrand and Cournot duopoly with differentiated products. It is shown that when marginal costs are sufficiently increasing in output, then it is always easier to sustain collusion under Cournot duopoly than under Bertrand duopoly for any degree of product substitutability.

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Collusive outcomes in price competition

Abstract: price competition, collusion, convex cost, L13,

Cited by 25 publications

References 9 publications

A Single Espresso, Please! Rationalizing Espresso Price Dispersion Across Italian Cities

A Single Espresso, Please! Rationalizing Espresso Price Dispersion Across Italian Cities

Optimal Export Policy With Upstream Price Competition

Collusion in Differentiated Duopolies with Quadratic Costs

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