Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/177603
Authors: 
Bolatto, Stefano
Lambertini, Luca
Year of Publication: 
2017
Series/Report no.: 
Quaderni - Working Paper DSE No. 1103
Abstract: 
We investigate the possibility for two vertically related firms to at least partially collude on the wholesale price over an in.nite horizon to mitigate or eliminate the e¤ects of double marginalisation, thereby avoiding contracts which might not be enforceable. We characterise alternative scenarios envisaging different deviations by the upstream firm and different punishments. This allows us to show that the most efficient case is that in which the upstream firm deviates along its best reply function and the punishment prescribes the disruption of the vertical relation for good after a deviation from the collusive path.
Subjects: 
collusion
double marginalisation
supply chain
vertical integration
JEL: 
D43
L13
L42
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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