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This article provides a framework for the analysis of cartel formation. It models the strategic interaction among firms who invest into production capacity, sell a near-homogeneous good, and are subject to unexpected demand shocks with persistence. The firms either compete or collude in prices....
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This book provides coherent theoretical and empirical analysis of firms' investment and financing decisions. It … results confirm theoretical precedents. Some firms are indeed financially constrained, for fixed investment as well as for R … firms to adopt a 'wait and see' strategy which eventually reduces investment, especially for irreversible investment …
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