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Detecting Collusion in Spatially Differentiated Markets

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  • Firgo, Matthias
  • Kügler, Agnes

Abstract

The empirical literature on mergers, market power and collusion in differentiated markets has mainly focused on methods relying on output and/or panel data. In contrast to this literature we suggest a novel approach that allows for the detection of collusive behavior among a group of firms making use of information on the spatial structure of horizontally differentiated products. By estimating best response functions using a spatial econometrics approach, we focus on differences in the strategic interaction in pricing between different groups of firms as well as on differences in price levels. We apply our method to the market for ski lift tickets using a unique data set on ticket prices and detailed resort-specific characteristics covering all ski resorts in Austria. (authors' abstract)

Suggested Citation

  • Firgo, Matthias & Kügler, Agnes, 2014. "Detecting Collusion in Spatially Differentiated Markets," Department of Economics Working Paper Series 188, WU Vienna University of Economics and Business.
    • Handle: RePEc:wiw:wus005:4347
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    Cited by:

    1. Matthias Firgo & Agnes Kügler, 2014. "Auswirkung der Verbundbildung auf die Preise in österreichischen Skigebieten," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(12), pages 851-862, December.
    2. Falk, Martin, 2017. "Gains from horizontal collaboration among ski areas," Tourism Management, Elsevier, vol. 60(C), pages 92-104.

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    More about this item

    Keywords

    tacit collusion; strategic alliances; spatial differentiation; ski lift ticket prices; Preisabsprache; Skilift; Strategische Allianz;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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