Stable Commitment in an Intertemporal Collusive Trade

Romeo Balanquit
Additional contact information
Romeo Balanquit: School of Economics, University of the Philippines Diliman

No 201301, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: This study presents a more general collusive mechanism that is sustainable in an oligopolistic repeated game. In this setup, firms can obtain average payoffs beyond the cooperative profits while at the same time improve consumer welfare through a lower market price offer. In particular, we introduce here the notion of intertemporal collusive trade where each oligopolist, apart from regularly producing the normal cooperative output, is also allowed in a systematic way to earn higher than the rest at some stages of the game. This admits subgame- perfection and is shown under some conditions to be Pareto-superior to the typical cooperative outcome.

Keywords: game; theory (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013-02
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as UPSE Discussion Paper No. DP 2013-01, February 2013

Downloads: (external link)
http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/705 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:phs:dpaper:201301

Access Statistics for this paper

More papers in UP School of Economics Discussion Papers from University of the Philippines School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by RT Campos ().