| Name: | Description: | Size: | Format: | |
|---|---|---|---|---|
| 254.95 KB | Adobe PDF |
Authors
Advisor(s)
Abstract(s)
The impact of demand growth on the collusion possibilities is investigated in
a Cournot supergame where market growth may trigger future entry and the
collusive agreement is enforced by the most profitable ‘grim trigger strategies’
available. It is shown that even in situations where perfect collusion can be
sustained after entry, coping with a potential entrant in a market which is
growing over time may completely undermine any pre-entry collusive plans of
the incumbent firms. This is because, before entry, a deviation and the following
punishment phase may become more attractive thanks to their additional effect
in terms of delaying entry.
Description
Keywords
Pedagogical Context
Citation
VASCONCELOS, Hélder - Sustaining Collusion in Growing Markets. Journal of Economics and Management Strategy. ISSN 1530-9134. Vol. 17, n.º 4 (2008), p. 973–1010
Publisher
Wiley Blackwell