Competitive Prices as Profit-Maximizing Cartel Prices

Even under antitrust enforcement, firms may still form a cartel in an infinitely-repeated oligopoly model when the discount factor is sufficiently close to one. We present a linear oligopoly model where the profit-maximizing cartel price converges to the competitive equilibrium price as the discount factor goes to one. We then identify a set of necessary conditions for this seemingly counter-intuitive result

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Year of publication:	2010
Authors:	Houba, Harold
Other Persons:	Motchenkova, Evgenia (contributor) ; Wen, Quan (contributor)
Publisher:	[2010]: [S.l.] : SSRN
Subject:	Theorie \| Theory \| Oligopol \| Oligopoly \| Kartellrecht \| Antitrust law \| Wiederholte Spiele \| Repeated games \| Rechtsdurchsetzung \| Law enforcement \| Kartell \| Cartel

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Extent:	1 Online-Ressource (11 p)
Series:	Tinbergen Institute Discussion Paper 10-047/1
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 27, 2010 erstellt
Other identifiers:	10.2139/ssrn.1597645 [DOI]
Classification:	L4 - Antitrust Policy ; C7 - Game Theory and Bargaining Theory
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10013144204