ENDOGENOUS AVAILABILITY, CARTELS, AND MERGER IN AN EQUILIBRIUM PRICE DISPERSION

In a generalization of the Butters advertising model, the equilibrium involves one firm that advertises at least twice as much as the others , who all advertise equally. A cartel formation game is considered, an d any equilibrium cartel involves at least two, but generally not all, firms. In one equilibrium, only the largest firms join the cartel. A merger game is considered. and, in equilibrium, the large film buys th e other films in sequence, with discounting equalizing the expected ut ility of the targets and prices rising over time. (C) 1994 Academic Pr ess, Inc.