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Cartel Sustainability and Cartel Stability

Working paper
Author/s: 
Marc Escrihuela_Villar
Issue number: 
2004.044
Publisher: 
FEEM
Year: 
2004
PDF [1]
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.
Tags: 
Industrial Organisation [2]

Source URL:http://coalitiontheory.net/content/cartel-sustainability-and-cartel-stability-0

Links
[1] http://www.feem.it/userfiles/attach/Publication/NDL2004/NDL2004-044.pdf [2] http://coalitiontheory.net/research-areas/industrial-organisation