Price vs Quantity in a Repeated Differentiated Duopoly

We investigate the choice of market variable, price or quantity, of an optimal implicit cartel. If the discount factor is high, the cartel can realize the monopoly profit in both cases. Otherwise, it is optimal for the cartel to rely on quantities in the collusive phase if goods are substitutes and prices if goods are complements. The reason is that this minimizes the gains from deviations from collusive play.

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Year of publication:	2000
Authors:	Lambertini, Luca ; Schultz, Christian
Publisher:	Bologna : Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)

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Series:	Quaderni - Working Paper DSE ; 379
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.6092/unibo/amsacta/4930 [DOI] hdl:10419/159220 [Handle] RePEc:bol:bodewp:379 [RePEc]
Source:	EconStor

Persistent link: https://www.econbiz.de/10011651273