Competition and collusion with fixed output

In many industries, output is fixed by exogenous constraints, so firms compete by allocating a given stock of supplies between different markets. This paper shows that collusion in such industries leads firms to shift output from high-margin markets to low-margin markets. As a result, welfare is generally reduced although prices decrease in some markets and increase in others.

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Year of publication:	2013
Authors:	Zenger, Hans
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 120.2013, 2, p. 259-261
Publisher:	Elsevier
Subject:	Collusion \| Fixed output \| Price discrimination

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Type of publication:	Article
Classification:	L41 - Monopolization; Horizontal Anticompetitive Practices ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

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