Cartel stability and the curvature of market demand
Article Abstract:
The effect of the curvature of market demand on cartel stability is analyzed based on Cournot and Bertrand behaviors. It was shown that firms are likely to act as quantity setters to increase cartel stability if demand is sufficiently convex. However, when the number of firms is high, price-setting behavior promotes their ability to collude. When the number of firms favors infinity and regardless of the characteristics of market demand, Cournot behavior was found to be more advantageous than Bertrand's in stabilizing collusion.
Publication Name: Bulletin of Economic Research
Subject: Economics
ISSN: 0307-3378
Year: 1996
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The demand for long distance telephone communication: a route-specific analysis of short-haul service
Article Abstract:
A model was formulated to analyze long distance telephone demand based on route-specific short-haul calling minutes. The model, which utilized Florida's 2,813 intra Local Access and Transport Areas (LATA) long-distance routes in 1990, yielded a -0.54 estimate for demand price and a 1.24 estimate for demand income elasticity. The price elasticity of demand rose to -0.71 after the price and the route-specific optional calling plan was taken into consideration.
Publication Name: Studies in Economics and Finance
Subject: Economics
ISSN: 1086-7376
Year: 1996
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