Strategic delegation improves cartel stability

Martijn A. Han

No 2012-056, SFB 649 Discussion Papers from Humboldt University Berlin, Collaborative Research Center 649: Economic Risk

Abstract: Fershtman and Judd (1987) and Sklivas (1987) show that strategic delegation reduces firm profits in the one-shot Cournot game. Allowing for infinitely repeated interaction, strategic delegation can increase firm profits as it improves cartel stability.

Keywords: strategic delegation; collusion; cartel stability (search for similar items in EconPapers)
JEL-codes: D43 L13 L20 L41 (search for similar items in EconPapers)
Date: 2012
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