Affiliation:
1. Department of Economics, Johns Hopkins University, Baltimore, MD 21218-2685.
2. Graduate School of Business, Stanford University, Stanford, CA 94305-5015.
Abstract
Motivated by recent cartel practices, a stable collusive agreement is characterized when firms' prices and quantities are private information. Conditions are derived whereby an equilibrium exists in which firms truthfully report their sales and then make transfers within the cartel based on these reports. The properties of this equilibrium fit well with the cartel agreements in a number of markets including citric acid, lysine, and vitamins. (JEL D43, D82, K21, L12, L61, L65)
Publisher
American Economic Association
Subject
Economics and Econometrics
Cited by
110 articles.
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