Antitrust & Competition Policy Blog

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University of Florida
Levin College of Law

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Friday, May 16, 2014

Branding and Collusion in Vertically Differentiated Industries

Daniel Garcia, University of Vienna examines Branding and Collusion in Vertically Differentiated Industries.

ABSTRACT: This paper presents a model of collusion in vertically differentiated industries where firms have the option to make their products distinguishable to consumers by attaching a brand. We show that if consumers’ preferences are linear in the quality dimension and their beliefs satisfy a standard refinement, collusion is facilitated in the absence of brands. More precisely, we show that if collusion is feasible with brands it is also feasible without them.

http://lawprofessors.typepad.com/antitrustprof_blog/2014/05/branding-and-collusion-in-vertically-differentiated-industries-.html

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