| Author: | Busse, M. |
| Title: | Multimarket contact and price coordination in the cellular telephone industry |
| Journal: | Journal of Economics and Management Strategy
2000 : FALL, VOL. 9:3, p. 287-320 |
| Index terms: | MANAGEMENT ECONOMICS TELECOMMUNICATIONS INDUSTRY |
| Language: | eng |
| Abstract: | Empirical studies have confirmed the predication of theoretical models that contact in multiple markets may enhance firms' abilities to tacitly collude and consequently achieve higher prices and profits. It has remained largely unexplored, however, how firms coordinate their actions. This paper identifies a method of pricing in the cellular telephone industry that seems to enable firms to coordinate their actions across markets. This pricing pattern is found to raise prices by approximately 7-10%, and cannot be attributed to a variety of noncooperative explanations. |
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