دانلود رایگان مقاله تبانی با جستجو های پر هزینه مصرف کننده

Abstract

I use standard consumer search models to study how an increase in market transparency (lower search costs or higher share of fully informed consumers) affects cartel stability. When firms sell horizontally differentiated products, cartels become more stable as the search cost increases; with homogeneous products, by contrast, the opposite holds. A higher share of fully informed consumers makes collusion less stable when the market is initially sufficiently transparent, whereas it happens otherwise if the market is originally little transparent.

4. Conclusion

According to the International Competition Network (2005) “the prohibition against cartels is now an almost universal component of competition laws” because competition between sellers is beneficial for consumers and the “competitive process only works when competitors set prices independently.” On the contrary, firms prefer to engage in secret price (quantity) coordination because then they earn higher profits. The objectives of firms and competition authorities contradict each other. Hence, it is important for policy makers to determine the conditions under which collusion is more likely to arise in order to implement proper consumer protection policy measures. This paper studies how notions of market transparency from the consumer point of view affect the likelihood of collusion. The analysis reveals that the answer to this question depends on two factors. One is the nature of the product market, in particular whether firms sell homogeneous or horizontally differentiated products. The other is the measurement of market transparency. When I relate market transparency to search costs, it turns out that cartel stability increases as search costs go up if products are horizontally differentiated, and it decreases if products are homogeneous. When I relate market transparency to the share of consumers who are fully informed, then in a homogeneous product market I find that cartel stability is non-monotonic in the share of shoppers. Hence, there is no unique answer to the question whether market transparency on the demand side hinders or facilitates collusion.