We study the optimal behaviour of a cartel faced with fringe competition and imperfectly attentive consumers. Intertemporal price dispersion obfuscates consumer comparison which aids through two channels: it reduces effectiveness free riding by fringe; relaxes cartel’s internal incentive constraints. Our theory explains survival price-setting in homogeneous product market, provides collusive ra...

In this paper, the Bertrand's price competition in the retail duopoly with asymmetric costs is analyzed. Retailers sell substitute products in the framework of the classical economic order quantity (EOQ) model with linear demand function. The market potential and competitor price are considered to be the bifurcation parameters of retailers. Levels of the barriers to market penetration depending...

Abstract We study a variation of the duopoly model by Kreps and Scheinkman (1983). Firms limited their capacity production engage in two stage game. In first they commit to levels not exceeding capacities which are then made common knowledge. second after has taken place firms simultaneously compete prices. Solution this sequential game shows that unique Cournot equilibrium outcome as is always...