This paper analyses the effect of multimarket contact on firms' behaviour. According to Bernheim and Whinston [1990], firms that meet in several markets for an infinite number of periods may find it profitable to redistribute market power among markets where tThis paper analyses the effect of multimarket contact on firms' behaviour. According to Bernheim and Whinston [1990], firms that meet in several markets for an infinite number of periods may find it profitable to redistribute market power among markets where they are operating. We present evidence supporting this prediction by using data from the Spanish hotel industry. Moreover, we also find that the omission of variables measuring multimarket contact creates a downward bias on the effect of concentration on prices. This result questions previous conclusions about the role of competition in industries where multimarket behaviour is expected.[+][-]
Nota:
This is the accepted version of the following article: Fernández, N. and Marín, P. L. (1998), Market Power and Multimarket Contact: Some Evidence from the Spanish Hotel Industry. The Journal of Industrial Economics, 46(3),301–315, which has been published in final form at: http://dx.doi.org/10.1111/1467-6451.00073
