Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98501
Authors: 
çIriðs, Doruk
Santos-Pinto, Luís
Year of Publication: 
2013
Citation: 
[Journal:] Games [ISSN:] 2073-4336 [Publisher:] MDPI [Place:] Basel [Volume:] 4 [Year:] 2013 [Issue:] 1 [Pages:] 50-65
Abstract: 
This paper departs from the standard profit-maximizing model of firm behavior by assuming that firms are motivated in part by personal animosity-or respect-towards their competitors. A reciprocal firm responds to unkind behavior of rivals with unkind actions (negative reciprocity), while at the same time, it responds to kind behavior of rivals with kind actions (positive reciprocity). We find that collusion is easier to sustain when firms have a concern for reciprocity towards competing firms provided that they consider collusive prices to be kind and punishment prices to be unkind. Thus, reciprocity concerns among firms can have adverse welfare consequences for consumers.
Subjects: 
fairness
reciprocity
collusion
repeated games
JEL: 
D43
D63
L13
L21
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article
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