Cartel stability under quality differentiation

DOI10.1016/J.ECONLET.2018.10.024MaRDI QIDQ2328517zbMATH OpenOpenAlexFDO

Authors Iwan Bos, Marco A. Marini

Publication date 10 October 2019

Published in Economics Letters (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1812.10293

zbMATH Keywords

cartel stabilitycollusionvertical differentiation

Mathematics Subject Classification ID

Microeconomic theory (price theory and economic markets) (91B24)

Abstract: This note considers cartel stability when the cartelized products are vertically differentiated. If market shares are maintained at pre-collusive levels, then the firm with the lowest competitive price-cost margin has the strongest incentive to deviate from the collusive agreement. The lowest-quality supplier has the tightest incentive constraint when the difference in unit production costs is sufficiently small.

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Cites work

• A Theory of Dynamic Oligopoly, I: Overview and Quantity Competition with Large Fixed Costs
• Cartel stability in advertising-intensive and R\&D-intensive industries
• Handbook of game theory and industrial organization. Volume II: Applications
• scientific article; zbMATH DE number 44397 (Why is no real title available?)
• Monopoly and product quality
• Price competition, quality and income disparities
• Relaxing Price Competition Through Product Differentiation

Cited in

(14)

• The critical discount factor as a measure for cartel stability?
• Cartel stability in advertising-intensive and R\&D-intensive industries
• Endogenous availability, cartels, and merger in an equilibrium price dispersion
• Cartel formation with quality differentiation
• The profit-sharing rule that maximizes sustainability of cartel agreements
• Stable Cartels
• A spatial model of cartel stability: the influence of production cost convexity
• Technology licensing and collusion
• Degree of product differentiation, antitrust enforcement and cartel stability
• Collusion under product differentiation
• Price competition with differentiated products on a two-dimensional plane: the impact of partial cartel on firms' profits and behavior
• Duopoly and endogenous single product quality strategies
• Cartel stability with quality-anchored buyers
• Monopoly and quality omission

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