We study collusion between a public firm and a private firm, characterizing the outcome (market shares, profits, and consumer surplus) that results from Nash bargaining between the two firms relative to the non-cooperative outcome. We find that if the public firm’s preference for consumer...

The paper considers an infinitely repeated competition between vertical manufacturer-retailer hierarchies. In every period, retailers privately observe the demand, consequently manufacturers pay retailers “information rents”. I compare between several collusive equilibria that differ in the...

Information Technology has allowed vertically related firms to share sales forecasts, production schedules, inventory, etc. This fact motivated many studies on how the retailer’s superior knowledge of market conditions affects pricing and competition within different vertical restraints. But...

Sophisticated collusive compensation schemes such as assigning future market shares or direct transfers are frequently observed in detected cartels. We show formally why these schemes are useful for dampening deviation incentives when colluding firms are temporary asymmetric. The relative...