Collusive Vertical Relations

Bolatto, Stefano ; Lambertini, Luca (2017) Collusive Vertical Relations. Bologna: Dipartimento di Scienze economiche DSE, p. 14. DOI 10.6092/unibo/amsacta/5615. In: Quaderni - Working Paper DSE (1103). ISSN 2282-6483.
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Abstract

We investigate the possibility for two vertically related firms to at least partially collude on the wholesale price over an infinite horizon to mitigate or eliminate the effects of double marginalisation, thereby avoiding contracts which might not be enforceable. We characterise alternative scenarios envisaging different deviations by the upstream firm and different punishments. This allows us to show that the most efficient case is that in which the upstream firm deviates along its best reply function and the punishment prescribes the disruption of the vertical relation for good after a deviation from the collusive path.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Bolatto, StefanoUniversità di Bologna0000-0003-0937-5258
Lambertini, LucaUniversità di Bologna0000-0001-6353-4753
Keywords
collusion, double marginalisation, supply chain, vertical integration
Subjects
ISSN
2282-6483
DOI
Deposit date
05 Jul 2017 15:14
Last modified
15 Feb 2018 10:16
URI

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