Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307531 
Year of Publication: 
2023
Citation: 
[Journal:] Journal of Economics [ISSN:] 1617-7134 [Volume:] 140 [Issue:] 3 [Publisher:] Springer Vienna [Place:] Vienna [Year:] 2023 [Pages:] 181-207
Publisher: 
Springer Vienna, Vienna
Abstract: 
Surveys of antitrust cases reveal that colluding firms usually (1) attempt to minimise the risk of prosecution, (2) achieve merely imperfect levels of collusion, (3) compete against some independently acting firms, and (4) adjust to market entries and exits. In contrast, existing oligopoly models neglect some of the four listed stylised facts and, thus, overlook important interdependencies between them. Therefore, the present paper develops a general quantity leadership model that simultaneously accommodates all four stylised facts. The model is a three-stage game in which each firm must make three consecutive decisions: market entry or not, collusion or not, and output quantity. The framework is augmented by an antitrust authority that ensures free market access. In addition, the antitrust authority may directly obstruct collusion and it may threaten prosecution. The results of this study indicate that the latter two instruments are rather ineffective.
Subjects: 
Cartel
Game
Leadership
Oligopoly
Stability
Sustainability
JEL: 
L13
L41
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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