This paper demonstrates that increased product differentiation will make it more difficult to sustain collusion when it is costly to coordinate or maintain collusion. This result holds for a wide range of models, including all those commonly used to model competition between differentiated...

We study firms' incentives to create switching costs using a four-period model consisting of two consecutive price-competing stages intervened by options to create switching costs early (before price competition) and late (during price competition). Acknowledging that many real/social switching...