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Sustainability of Collusion and Market Transparency in a Sequential Search Market: a Generalization

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  • Jacopo De Tullio
  • Giuseppe Puleio

Abstract

The present work generalizes the analytical results of Petrikaite (2016) to a market where more than two firms interact. As a consequence, for a generic number of firms in the oligopoly model described by Janssen et al (2005), the relationship between the critical discount factor which sustains the monopoly collusive allocation and the share of perfectly informed buyers is non-monotonic, reaching a unique internal point of minimum. The first section locates the work within the proper economic framework. The second section hosts the analytical computations and the mathematical reasoning needed to derive the desired generalization, which mainly relies on the Leibniz rule for the differentiation under the integral sign and the Bounded Convergence Theorem.

Suggested Citation

  • Jacopo De Tullio & Giuseppe Puleio, 2021. "Sustainability of Collusion and Market Transparency in a Sequential Search Market: a Generalization," Papers 2105.02094, arXiv.org.
    • Handle: RePEc:arx:papers:2105.02094
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    References listed on IDEAS

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    1. Petrikaitė, Vaiva, 2016. "Collusion with costly consumer search," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 1-10.
    2. Janssen, Maarten C.W. & Moraga-Gonzalez, Jose Luis & Wildenbeest, Matthijs R., 2005. "Truly costly sequential search and oligopolistic pricing," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 451-466, June.
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