Cartel Sustainability and Cartel Stability
Data
01.01.2004
01.01.2004
Autori
Marc Escrihuela-Villar
Codice JEL
L11,L13,L41,D43
L11,L13,L41,D43
Parole chiave:
Collusion,Partial cartels,Trigger strategies,Optimal punishment
Collusion,Partial cartels,Trigger strategies,Optimal punishment
Publisher
Climate Change and Sustainable Development
Climate Change and Sustainable Development
Editor
Carlo Carraro
Carlo Carraro
The paper studies how does the size of a cartel affect the possibility that its members can sustain a collusive agreement. I obtain that collusion is easier to sustain the larger the cartel is. Then, I explore the implications of this result on the incentives of firms to participate in a cartel. Firms will be more willing to participate because otherwise, they risk that collusion completely collapses, as remaining cartel members are unable to sustain collusion.