Delegation and Cartel Stability

Lambertini, Luca (1994) Delegation and Cartel Stability. DOI 10.6092/unibo/amsacta/808.

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Abstract

The effect of delegation on cartel stability is addressed in a duopoly for a homogeneous product, under Cournot competition. The main findings are that if only one firm is managerial, the critical discount factor is increased by the presence of a weight attached to sales, so that cartel stability is decreased, while if both are managerial the opposite holds. As a consequence, the inclusion of sales in both firms’ objective function represents an incentive towards collusion.

Abstract

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Monografia (Working paper)

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