Collusion with Internal Contracting

Gea M. Lee

No 693, Econometric Society 2004 Far Eastern Meetings from Econometric Society

Abstract: In this paper, an infinitely-repeated Bertrand game is considered. The model has a two-tier relationship; two firms make a self-enforced collusive agreement and each firm writes a law-enforced contract to its privately-informed agent. The main finding is that in optimal collusion, interaction between intra-firm (internal) contracting and inter-firm collusion may be exploited; inter-firm collusion may enhance the efficiency of internal contract, and conversely, internal contracting may facilitate collusion

Keywords: collusion; internal contract; repeated games; market allocation (search for similar items in EconPapers)
JEL-codes: C73 L13 L14 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-com and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:feam04:693

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