Core Existence in Vertically Differentiated Markets

Marini, Marco A.; Tarola, Ornella

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Core Existence in Vertically Differentiated Markets

Economics Letters, 149, 28-32, 2016

9 Pages Posted: 8 May 2020

See all articles by Marco A. Marini

Ornella Tarola

Sapienza University of Rome

Date Written: 2016

Abstract

We prove that a sufficient condition for the core existence in a n-firm vertically differentiated market is that the qualities of firms' products are equally-spaced along the quality spectrum. This result contributes to see that a fully collusive agreement among firms in such markets is more easily reachable when product qualities are not distributed too asymmetrically along the quality ladder.

Keywords: Vertically Differentiated Markets, Price Collusion, Grand Coalition, Coalition Stability, Core

JEL Classification: D42, D43, L1, L12, L13, L41

Suggested Citation: Suggested Citation

Marini, Marco A. and Tarola, Ornella, Core Existence in Vertically Differentiated Markets (2016). Economics Letters, 149, 28-32, 2016 , Available at SSRN: https://ssrn.com/abstract=3575794