Cartel Stability with Subjective Detection Beliefs
نویسنده
چکیده
The condition is derived for Friedman’s trigger strategy to sustain a collusive market equilibrium as a noncooperative Nash equilibrium given subjective beliefs as to the antitrust authority’s ability of succesfully disolving the illegal cartel.
منابع مشابه
Cartel pricing dynamics in the presence of an antitrust authority
Cartel pricing is characterized when firms are concerned about creating suspicions that a cartel has formed. Balancing concerns about maintaining the stability of the cartel with those of avoiding detection, the cartel may either (i) gradually raise price to its steady-state level or (ii) gradually raise price and then have it decline to its steady-state level. Antitrust laws may have a pervers...
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