Affordable Access

Collusion Sustainability with Multimarket Contacts: Revisiting HHI Tests

Authors

Abstract

Our paper focuses on the relationship between market concentration and collusion sustainability in a framework of multimarket contacts. We consider two independent and symmetric markets in which a subset of firms are active in both markets. When firms are able to transfer market power from one market to another, firms have strong incentives to collude even in a highly competitive market. This result is relevant for competition policy since assessing market concentration using HHI index could be misleading in some situations.

There are no comments yet on this publication. Be the first to share your thoughts.