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Resale and collusion in a dynamic market for semidurable goods

Schiraldi, Pasquale and Nava, Francesco (2012) Resale and collusion in a dynamic market for semidurable goods. Journal of Industrial Economics, 60 (2). pp. 274-298. ISSN 0022-1821

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Abstract

The paper studies the incentives to form collusive agreements when goods can be traded in second-hand markets. It will be shown that such incentives crucially depend on the rate of depreciation of the durable good and on consumer heterogeneity. The main contribution of the paper shows that an active second-hand market may strengthen the incentives to collude, as do policies that affect the functioning of the second-hand market (e.g., leasing policy and buy-back). It will also be argued that the oligopoly incentives to adopt strategies that strengthen collusion often differ from the monopoly incentives to increase profits.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/%28...
Additional Information: © 2012 Blackwell Publishing and the Editorial Board of the Journal of Industrial Economics
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
Sets: Departments > Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 16 Oct 2012 15:23
URL: http://eprints.lse.ac.uk/46831/

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