Abstract

http://ssrn.com/abstract=111474
 
 

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Market Segmentation, Market Integration and Tacit Collusion


Nicolas Schmitt


Simon Fraser University; CESifo (Center for Economic Studies and Ifo Institute)

Constantin Colonescu


American University in Bulgaria

June 1998

Center for Economic Studies Working Paper at University of Munich, No. 166

Abstract:     
This paper shows that moving from market segmentation to market integration (i.e. firms can no longer discriminate among markets) may have anti-competitive effects in a repeated game setting in which a simple trigger strategy is the enforcement strategy. In particular, we show that two countries can never both experience pro-competitive gains and that two similar countries always both experience anti-competitive effects from market integration. We show that the same conclusions hold when trade liberalization is understood as being a decrease in bilateral barriers to trade followed by the switch from market segmentation to market integration.

JEL Classification: F12, F15, L41

working papers series


Not Available For Download

Date posted: August 9, 1998  

Suggested Citation

Schmitt, Nicolas and Colonescu, Constantin, Market Segmentation, Market Integration and Tacit Collusion (June 1998). Center for Economic Studies Working Paper at University of Munich, No. 166. Available at SSRN: http://ssrn.com/abstract=111474

Contact Information

Nicolas Schmitt (Contact Author)
Simon Fraser University ( email )
Department of Economics
8888 University Drive
Burnaby, BC V5A 1S6
Canada
604 291 4582 (Phone)
HOME PAGE: http://www.sfu.ca/~schmitt/
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Constantin Colonescu
American University in Bulgaria ( email )
Blagoevgrad, 2700
Bulgaria
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