Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/47553
Authors: 
Neubecker, Leslie
Year of Publication: 
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
Collusion
JEL: 
C73
L13
L23
L41
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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