Showing 1 - 10 of 268
We study the impact of tacit collusion on price dispersion in the U.S. airline industry. We find that tacit collusion driven by multimarket contact has a positive effect on prices, but a negative effect on price dispersion. Our empirical results suggest that airfares throughout the price...
Persistent link: https://www.econbiz.de/10012846715
This paper investigates the determinants and competitive effects of legacy carriers' outsourcing decision with independent regional airlines. Legacy carriers allocate a larger share of their operations to an independent regional airline partner compared to their own fleet or a wholly owned...
Persistent link: https://www.econbiz.de/10012975450
This paper studies imperfect price competition between two intermediaries in an electronic business-to-business matching market with indirect network externalities. The intermediaries differ with regard to their ownership structure: an independent third party incumbent marketplace competes with...
Persistent link: https://www.econbiz.de/10010296784
We show that a monopolist final goods producer may find it profitable to create competition by licensing its technology if the input market is imperfectly competitive. With a centralized union, we show that licensing by a monopolist is profitable under both uniform and discriminatory wage...
Persistent link: https://www.econbiz.de/10010296821
We analyze the role of consumer expectations in a Hotelling model of price competition when products exhibit network effects. Expectations can be strong (stubborn), weak (price-sensitive) or partially stubborn (a mix of weak and strong). As a rule, the price-sensitivity of demand declines when...
Persistent link: https://www.econbiz.de/10010303797
We show that concealing cost information is a dominant strategy in heterogeneous Bertrand oligopolies. This result enables us to endogenize the number of firms in a market in terms of market size, entry costs, and unit cost uncertainty.
Persistent link: https://www.econbiz.de/10010305054
This paper shows that obligations from debt hinder tacit collusion if equity owners are protected by limited liability. In contrast to its advantageous commitment value in short-run competition, leverage reduces profits from infinite interaction. Contrasting uncorrelated shocks with a cyclical...
Persistent link: https://www.econbiz.de/10010305086
This paper further develops the standard modelling of information exchange between firms in the presence of demand uncertainty which applies to firms in new industries and insecure regions or markets. We replace the normal distribution of the random variables, commonly used because of its...
Persistent link: https://www.econbiz.de/10010305097
In this paper we extend the model of vertical product differentiation to also consider information disparities about the extent of quality differences. Equilibrium prices turn out to depend not only on the share of informed consumers but also on uninformed consumers beliefs about quality...
Persistent link: https://www.econbiz.de/10011324907
We study a discrete time dynamic game of price competition with spatially differentiated products and price adjustment costs. We characterise the Markov perfect and the open-loop equilibrium of our game. We find that in the steady state Markov perfect equilibrium, given the presence of...
Persistent link: https://www.econbiz.de/10011325148