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Unpublished Paper
Collusion at the Extensive Margin
(2010)
  • Joshua S Gans
  • Martin C Byford
Abstract

This paper is the first to examine collusion at the extensive margin (whereby fi rms collude by avoiding entry into each other's markets or territories). We demonstrate that such collusion o ers distinct predictions for the role of multiple markets in sustaining collusion such as the use of proportionate response enforcement mechanisms, the possibilities of oligopolistic competition with a collusive fringe, and predatory entry. We argue that collusion at the extensive margin poses difficult issues for antitrust authorities relative to its intensive margin counterpart.

Keywords
  • Credible Threats,
  • Proportional Response,
  • Segmented Markets,
  • Multi-Market Contact,
  • Predatory Entry,
  • Markov Perfect Equilibrium
Publication Date
Fall September 27, 2010
Citation Information
Joshua S Gans and Martin C Byford. "Collusion at the Extensive Margin" (2010)
Available at: http://works.bepress.com/joshuagans/42/