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Tsuyoshi Toshimitsu
''Tacit collusion and its welfare effect in a network product market''
( 2018, Vol. 38 No.4 )
Based on a horizontally differentiated duopoly model with network externalities, and focusing on the role of compatibility between products, we demonstrate the conditions under which collusive behavior improves social welfare. In particular, if the degree of a network compatibility effect upgraded by collusive agreement is sufficiently large, collusion increases consumer surplus compared with noncooperative Cournot competition.
Keywords: collusion; network externality; compatibility; horizontally differentiated Cournot duopoly; welfare
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
L2 - Firm Objectives, Organization, and Behavior: General
Manuscript Received : May 21 2018 Manuscript Accepted : Oct 10 2018

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