Spatially asymmetric firms and the sustainability of a price agreement

We study collusion between price discriminating firms which are asymmetrically located in a linear city. We obtain that higher distance increases the sustainability of the collusive agreement for any degree of spatial asymmetry, and more spatial symmetry between firms increases collusion sustainability whatever is the location of the firms in the space, both assuming grim-trigger and optimal punishment.

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Year of publication:	2011
Authors:	Colombo, Stefano
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 31.2011, 3, p. 2414-2421
Publisher:	AccessEcon
Subject:	Collusion \| Spatial asymmetry

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	L1 - Market Structure, Firm Strategy, and Market Performance ; D4 - Market Structure and Pricing
Source:	RePEc - Research Papers in Economics

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