A dynamic Bertrand-duopoly model where price leadership emerges in equilibrium is developed. In the price leadership equilibrium, a firm leads price changes and its competitor always matches in the next period. The firms produce a homogeneous product and are identical except for the information...

We investigate the possibility for two vertically related firms to at least partially collude on the wholesale price over an in.nite horizon to mitigate or eliminate the e¤ects of double marginalisation, thereby avoiding contracts which might not be enforceable. We characterise alternative...