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Title:Does cooperation in manufactoring foster tacit collusion PDF Logo
Authors:Neubecker, Leslie
Issue Date:2003
Series/Report no.:Tübinger Diskussionsbeiträge 261
Abstract:This paper analyzes the effect of cooperation in manufacturing on firms' inclination to collude in the market. Compared to non-cooperation in manufacturing, coordination of the investments in production yields a higher competitive profit. If firms intensify cooperation and produce in a joint plant, this profit is still higher due to lower investment costs. Since firms return to competition after a defection from the collusive agreement, a high competitive profit implies a weak punishment. Collusion is thus more difficult, the closer firms cooperate in manufacturing. Moreover, given competition or collusion in the market, joint production yields the highest profit and welfare.
Subjects:): Manufacturing
Cooperative production
Dynamic competition
Persistent Identifier of the first edition:urn:nbn:de:bsz:21-opus-18717
Document Type:Working Paper
Appears in Collections:Tübinger Diskussionsbeiträge, Universität Tübingen

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