Summary In a static supergame context, a model is presented in which a foreign and a domestic firm form a cartel for selling a homogeneous good. In order to maximize joint cartel profit, the two firms have agreed to restrict sales to their own home market. Due to transfer costs, this market...

Summary Countries differ substantially in the emphasis on the public sector and the ratio between state consumption and provision of public goods. It seems that these differences are often not well explained by only assuming a heterogeneous population. In this paper, I take differing state...