Exporting Collusion under Capacity Constraints: an Anti-Competitive E¤ect of Market Integration

  • Federico Bo¤ay, Carlo Scarpaz
  • Published 2007

Abstract

This paper examines the welfare e¤ects of interconnecting two (network) markets that were previously separated. In each market a di¤erent set of capacity-constrained …rms operate. Firms engage in a supergame and collude whenever it is rational for them to do so. We …nd that, under certain parametric restrictions, interconnection of the two markets may… (More)

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