The choice between quantity and price in order to stabilize collusion is modeled here. It is shown that this relocates the prisoners’ dilemma backwards, from the market stage to the stage where the market variable is chosen in order to sustain collusion, and where discount rates appear as the...

Danish ready-mixed concrete is produced in regional oligopolies. Firms rely on price discrimination through secret discounts. The antitrust authority interprets this as lack of competition and has decided to activate its chief weapon against dormant competition: To make the market more...

We characterize the interplay between firms’ decision in terms of product differentiation and the nature of their ensuing market behaviour. We prove the existence of a non-monotone relationship between firms’ decision at the development stage and their intertemporal preferences.

General equilibrium models of oligopolistic competition give rise to relative prices only without determining the price level. It is well known that the choice of a numéraire or, more generally, of a normalization rule converting relative prices into absolute prices entails drastic consequences...

With one-way spillovers, the standard symmetric two-period R&D model leads to an asymmetric equilibrium only, with endogenous innovator and imitator. We show how R&D decisions and measures of firm heterogeneity - market shares, R&D shares, and profits - depend on spillovers and on R&D costs....

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...

We survey some of the literature on the effects of improved market transparency on competition in oligopoly. Generally, improved transparency from the perspective of firms makes detection of deviations from tacitly collusive agreements easier, thus facilitating oligopolistic coordination. On the...

Antitrust practitioners and consumers protectionists often argue that market transparency should be improved to allow consumers to shop around for bargain prices thereby putting pressure on oligopolists´ pricing. We model how transparency, interpreted as the comparability from the point of view...

Advance production serves as a means of quantity commitment. Therefore, a quantity-competing firm may have an incentive to invest in advance production in order to pre-empt its opponent(s), even when [i] it is technologically more costly than on-spot production, and [ii] it does not entitle the...