Collusion in a Differentiated Market and Environmental Network Externality

Pasquale Marcello Falcone


We analyse the effect of a “green network externality” in a context of consumers’ environmental sensitiveness and competition between firms in both environmental quality and product prices. In particular, we investigate firms ‘aptitude to implicitly collude on prices in a vertically differentiate market. We find that green network effects hamper collusion. We also find that firms collude if they recognize an adequate value in future joint profits.

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Review of European Studies   ISSN 1918-7173 (Print)   ISSN 1918-7181 (Online)

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