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A widely debated question in recent years by both strategy theorists and antitrust practitioners is what role product differentiation between firms plays in their ability to sustain a collusive agreement in order to reduce the strength of competition and gain higher profits. This paper addresses...
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In this paper, we tackle the dilemma of pruning versus proliferation in a vertically differentiated oligopoly under the …
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. Within this setting, we study four types of price-fixing agreement: (i) a segment-wide cartel in the premium submarket only …, (ii) a segment-wide cartel in the standard submarket only, (iii) two segment-wide cartels, and (iv) an industrywide cartel …-wide cartel prefers to maintain market shares at pre-collusive levels. The impact on consumer and social welfare critically …
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