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Penalizing cartels : the case for basing penalties on price overcharge

Katsulakos, Giannēs S.; Motchenkova, Evgenia; Ulph, David - 2014

In this paper we set out the welfare economics based case for imposing cartel penalties on the cartel overcharge rather … of a penalty based on the cartel overcharge with three other penalty regimes: fixed penalties; penalties based on revenue … conjunction with the above result, our analysis of cartel stability (and thus deterrence), shows that penalties based on the …

Persistent link: https://www.econbiz.de/10010408455

R&D-Hindering Collusion

Bacchiega, Emanuele; Lambertini, Luca; Mantovani, Andrea - 2008

In an extended version of d'Aspremont and Jacquemin's (1988) R&D competition model we find a region where the game is a prisoner's dilemma: firms still invest in R&D but they would obtain a higher profit by not investing at all. In a repeated version of the game, we prove that firms implicitly...

Persistent link: https://www.econbiz.de/10014212777

Tacit Collusion Under Interest Rate Fluctuations

Dal Bo, Pedro - 2002

In contrast to the existing literature on repeated games that assumes a fixed discount factor, I study an environment in which it is more realistic to assume a fluctuating discount factor. In a repeated oligopoly, as the interest rate changes, so too does the degree to which firms discount the...

Persistent link: https://www.econbiz.de/10014122852

Optimal Collusion with Limited Liability

Billette de Villemeur, Étienne - 2017

Collusion sustainability depends on firms' ability to impose sufficiently severe punishments in the event of deviation from the collusive rule. We extend results from the literature on optimal collusion by investigating the role of a limited liability constraint. We examine all situations in...

Persistent link: https://www.econbiz.de/10012963126

Collusion in markets with syndication

Hatfield, John William; Kominers, Scott Duke; Lowery, … - 2018

Many markets, including markets for IPOs and debt issuances, are syndicated: each winning bidder invites competitors to join its syndicate to complete production. Using repeated extensive form games, we show that collusion in syndicated markets may become easier as market concentration falls,...

Persistent link: https://www.econbiz.de/10011901727

Partial collusion with asymmetric cross-price effects

Savorelli, Luca - 2010

Asymmetries in cross-price elasticities have been demonstrated by several empirical studies. In this paper we study from a theoretical stance how introducing asymmetry in the substitution effects influences the sustainability of collusion. We characterize the equilibrium of a linear Cournot...

Persistent link: https://www.econbiz.de/10011737876

On Tacit versus Explicit Collusion

Awaya, Yu; Krishna, Vijay - 2014

Antitrust law makes a sharp distinction between tacit and explicit collusion whereas the theory of repeated games -- the standard framework for studying collusion -- does not. In this paper, we study this difference in Stigler's (1964) model of secret price cutting. This is a repeated game with...

Persistent link: https://www.econbiz.de/10014141031

Partial Cross Ownership and Tacit Collusion : A Comment

Corradi, Marco Claudio - 2014

The coordinated competitive effects of silent ownerships in rival firms have been studied recently in the context of an infinitely repeated Bertrand oligopoly model by Gilo and Spiegel (2003). Focusing on their investigation, the purpose of the present note is two-fold, to provide a general...

Persistent link: https://www.econbiz.de/10013055405

Cartel stability in times of low interest rates

Lenhard, Severin - 2021 - Version: March 2021

thus increases cartel stability. If firms access the capital market, an additional effect comes into play: a low interest … measure for a cartel's stability regarding the two opposing effects. Stability is U-shaped in the interest rate. We test our …

Persistent link: https://www.econbiz.de/10012510306

Optimal Collusion with Private Information

Bagwell, Kyle; Athey, Susan - 2013

We analyze collusion in an infinitely repeated Bertrand game, where prices are publicly observed and each firm receives a privately observed, i.i.d. cost shock in each period. Productive efficiency is possible only if high-cost firms relinquish market share. In the most profitable collusive...

Persistent link: https://www.econbiz.de/10014034931