Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87085
Authors: 
Houba, Harold
Motchenkova, Evgenia
Wen, Quan
Year of Publication: 
2010
Series/Report no.: 
Tinbergen Institute Discussion Paper 10-047/1
Abstract: 
Even under antitrust enforcement, firms may still form a cartel in an infinitely-repeated oligopoly model when the discount factor is sufficiently close to one. We present a linear oligopoly model where the profit-maximizing cartel price converges to the competitive equilibrium price as the discount factor goes to one. We then identify a set of necessary conditions for this seemingly counter-intuitive result.
Subjects: 
Antitrust enforcement
Cartel
Oligopoly
Repeated game
JEL: 
L4
C7
Document Type: 
Working Paper

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