Second-Hand Markets and Collusion byManufacturers of Semidurable Goods

Abstract

The focus of the present work is to study the impact of the second-hand market the collusivebehavior. I analyze firms' preferences for having an active second-hand market and whetherpolicies (i.e. leasing policy, buy-back policy and warranty policy) that affect the functioningof the second-hand market strengthen collusion. I show how collective incentives to adoptstrategies that strengthen collusion often differ from monopoly incentives to achieve higherprofits.Bertrand competition, buy-back policies, collusion, leasing, semi-durability,second-hand market, warranty.