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Delbono, Flavio ; Lambertini, Luca
(2014)
Nationalization as credible threat against tacit collusion.
Bologna:
Dipartimento di Scienze economiche DSE,
p. 19.
DOI 10.6092/unibo/amsacta/4091.
In: Quaderni - Working Paper DSE
(972).
ISSN 2282-6483.
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Abstract
Within a simple model of differentiated oligopoly, we show that tacit collusion may be prevented by the threat of nationalising a private firm coupled with the appropriate choice of the weight given to private profits in the maximand of the nationalised company. We characterise the properties of such a threat and prove that it may allow to credibly deter tacit collusion.
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