Cartel Size and Collusive Stability with Non-Capitalistic Players

Delbono, Flavio ; Lambertini, Luca (2014) Cartel Size and Collusive Stability with Non-Capitalistic Players. Bologna: Dipartimento di Scienze economiche DSE, p. 15. DOI 10.6092/unibo/amsacta/4028. In: Quaderni - Working Paper DSE (948). ISSN 2282-6483.
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Abstract

A well established belief both in the game-theoretic IO and in policy debates is that market concentration facilitates collusion. We show that this piece of conventional wisdom relies upon the assumption of profit-seeking behaviour, for it may be reversed when firms pursue other plausible goals. To illustrate our intuition, we investigate the incentives to tacit collusion in an industry formed by Labor-Managed (LM) enterprises. We characterize the perfect equilibrium of a supergame in which LM firms play an infinitely repeated Cournot game. We show that the critical threshold of the discount factor above which collusion is stable (i) is lower in the LM industry than in the capitalistic one; (ii) monotonically decreases with the number of firms.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Delbono, Flavio
Lambertini, Luca
Keywords
cartel stability, labour-managed firms, repeated game
Subjects
ISSN
2282-6483
DOI
Deposit date
30 May 2014 10:24
Last modified
16 Mar 2015 15:14
URI

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