Download This PaperCompetition and Collusion with Fixed Output
9 Pages Posted: 19 Apr 2013 Last revised: 22 May 2013
Date Written: April 6, 2013
Abstract
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.
Keywords: collusion, fixed output, price discrimination
JEL Classification: L41, L13
Suggested Citation: Suggested Citation
Zenger, Hans, Competition and Collusion with Fixed Output (April 6, 2013). Economics Letters, Vol. 120, No. 2, pp. 259-261, 2013, Available at SSRN: https://ssrn.com/abstract=2253967
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