Bigoni, Maria; Potters, Jan; Spagnolo, Giancarlo - C.E.P.R. Discussion Papers - 2012
Flexibility - the ability to react swiftly to others' choices - facilitates collusion by reducing gains from defection … before opponents react. Under imperfect monitoring, however, flexibility may also hinder collusion by inducing punishment … after too few noisy signals. The combination of these forces predicts a non-monotonic relationship between flexibility and …