Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 298: Transparency and Competition

Arvid Nilsson
Additional contact information
Arvid Nilsson: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: This paper examines the effects of search costs on prices in a Bertrand duopoly. It is shown that if the search cost is lowered, the expected price goes down in a single play of the stage game. However, if the game is repeated it may be easier to sustain collusion the lower the search cost. In other words increased transparency may facilitate collusion even if the sellers' information is unaffected. A transitory improvement of price transparency unambiguously leads to lower prices. Hence, the model provides theoretical support for the price publication practices of consumers' councils.

Keywords: Bertrand Oligopoly; Collusion; Competition Policy; Imperfect Information; Transparency

JEL-codes: C72; C73; L13; L41

22 pages, First version: February 4, 1999. Revised: November 29, 1999. Earlier revisions: November 29, 1999.

Full text files PDF-file Full text
hastef0298.rev.pdf PDF-file Full text PostScript file Full text PostScript file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Helena Lundin ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2020-02-16 18:55:44.