Sikdar, S ORCID: https://orcid.org/0000-0003-1810-6025 (2020) Multimarket Collusion and Trade with Strategic Government Policies. TBC. (Unpublished)

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Abstract

We analyze the impact of strategic government policies on market share and welfare when
an international duopoly sells differentiated products in geographically-separated markets. Two
firms, located in different countries, sell their products in both countries. Cross-hauling of goods
not only incurs a transportation cost, but also generates pollution. We analyze two scenarios: (i)
firms compete in both markets and (ii) firms collude across the two markets, i.e., multimarket
collusion. Domestic market coverage by the home firm is lower, i.e., trade volume is higher,
under collusion relative to competition. The collusive market shares and trade volumes are
closer to the first-best and welfare is higher under collusion than under competition.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculty of Humanities and Social Sciences > School of Humanities
Depositing User: Symplectic
Date Deposited: 13 Aug 2020 09:25
Last Modified: 08 Mar 2021 10:14
URI: https://eprints.keele.ac.uk/id/eprint/7933

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