Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86082
Authors: 
Hinloopen, J.
Year of Publication: 
2003
Series/Report no.: 
Tinbergen Institute Discussion Paper 03-104/1
Abstract: 
To account for the illegal nature of price-fixing agreements, detection probabilities are introduced in a dynamic oligopoly. It follows that for a trigger strategy to sustain a non-cooperative collusive equilibrium as a SPNE both the discount rate and all per-period detection probabilities have to be `low enough'. Also, the domain reduces for which strictest incentive compatibility constraint is binding of the concomitant non-stationary supergame if (i) any per-period detection probability increases, (ii) prospective fine payments are increased, (iii) the period of limitation is reduced for violating antitrust laws.
Subjects: 
Cartel stability
trigger strategy
detection probabilities
period of limitation
JEL: 
L12
L41
Document Type: 
Working Paper

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