The condition is derived for Friedman 's trigger strategy to sustaina collusive market equilibrium as a noncooperative Nash equilibriumgiven subjective beliefs as to the antitrust authority's ability of suc-cesfully dissolving the illegal cartel.

To account for the illegal nature of price-fixing agreements, detection probabilities are introduced in a dynamic oligopoly. It follows that for a trigger strategy to sustain a non-cooperative collusive equilibrium as a SPNE both the discount rate and all per-period detection probabilities have...

An increase in cartel discovery probability due to irregular price movements that result from cartel defection is shown to increase cartel stability as short-run defection profits are less likely to be earned.

The Routh-Hurwitz stability condition is disentangled for choice variables that are strategic substitutes or strategic complements. This yields distinct stability conditions that are not necessarily symmetric. Two examples illustrate this result.

Intuitively, extending the period of repose for price fixing agreements enhances the effectiveness of competition policy enforcement. This paper proofs this intuition wrong. As extending the repose period reduces cartel members' defection payoff while it leaves unaltered expected compliance...