Endogenous Cartel Formation with Heterogeneous Firms

Arbeitspapier

In the context of an infinitely repeated capacity-constrained price game, we endogenize the composition of a cartel when .rms are heterogeneous in their capacities. When .rms are sufficiently patient, there exists a stable cartel involving the largest .rms. A .rm with sufficiently small capacity is not a member of any stable cartel. When a cartel is not all-inclusive, colluding firms set a price that serves as an umbrella with non-cartel members pricing below it and producing at capacity. Contrary to previous work, our results suggest that the most severe coordinated e¡èects may come from mergers involving moderate-sized firms, rather than the largest or smallest firms.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 544

Classification and Topics

• Classification: Wirtschaft
• Subject: Collusion ; Cartel Size ; Kartell ; Betriebliche Preispolitik ; Preisführer ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bos, Iwan ; Harrington, Joseph E.
• Event: Veröffentlichung
• (who): The Johns Hopkins University, Department of Economics
• (where): Baltimore, MD
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/49874
• Last update: 10.03.2025, 11:43 AM CET