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Cartel stability in advertising-intensive and R&D-intensive industries

Symeonidis, G (1999) 'Cartel stability in advertising-intensive and R&D-intensive industries.' Economics Letters, 62 (1). 121 - 129. ISSN 0165-1765

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Collusive pricing by firms producing a vertically differentiated product is less likely the larger the 'quality' difference between them, because, as one firm increases its investment in product quality or brand image, a low-spending rival is increasingly unlikely to adhere to a collusive arrangement. This result is robust to whether firms set prices or quantities and may explain the low occurrence of collusive pricing in advertising-intensive and R&D-intensive industries.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 16 Aug 2012 10:27
Last Modified: 03 Jun 2020 10:15

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