Title: Collusive behavior with heterogeneous firms
Authors: Verboven, Frank # ×
Issue Date: May-1997
Publisher: Elsevier science bv
Series Title: Journal of economic behavior & organization vol:33 issue:1 pages:121-136
Abstract: In a repeated duopoly with heterogeneous firms I ask which enforceable collusive arrangement is likely to prevail. I propose the equilibrium at which both firms are just indifferent between colluding and defecting. For discount factors not exceeding a critical level, I show this equilibrium is Pareto-optimal, possibly even the unique Pareto-optimum. I then apply bargaining theory and show that the proposed equilibrium is the likely outcome of explicit negotiations. Finally, I argue that the proposed equilibrium is an obvious focal point on which firms may tacitly coordinate. The proposed equilibrium promises to be useful for comparative statics analysis of collusive oligopoly.
ISSN: 0167-2681
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center of Econometrics, Leuven
× corresponding author
# (joint) last author

Files in This Item:

There are no files associated with this item.

Request a copy


All items in Lirias are protected by copyright, with all rights reserved.

© Web of science