When does aftermarket monopolization soften foremarket competition?

• Autores: Yuk-fai Fong, Jin Li, Ke Liu
• Localización: Journal of Economics & Management Strategy, ISSN-e 1530-9134, Vol. 25, Nº. 4, 2016, págs. 852-879
• Idioma: inglés
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• Resumen

  • This paper investigates firms' abilities to tacitly collude when they each monopolize a proprietary aftermarket. When firms' aftermarkets are completely isolated from foremarket competition, they cannot tacitly collude more easily than single-product firms. However, when their aftermarket power is contested by foremarket competition as equipment owners view new equipment as a substitute for their incumbent firm's aftermarket product, profitable tacit collusion is sustainable among a larger number of firms. Conditions under which introduction of aftermarket competition hinders firms' ability to tacitly collude are characterized. [ABSTRACT FROM AUTHOR]