The Power of Communication

David Rahman ()

American Economic Review, 2014, vol. 104, issue 11, 3737-51

Abstract: In this paper, I offer two ways in which firms can collude: secret monitoring and infrequent coordination. Such collusion is enforceable with intuitive communication protocols. I make my case in the context of a repeated Cournotoligopoly with flexible production, prices that follow a Brownian motion and no monetary side payments, an environment where it has previously been argued that any collusion is impossible. Trade associations can easily facilitate collusion by mediating communication amongst firms.

JEL-codes: D21 D43 L12 L13 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.11.3737
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Citations: View citations in EconPapers (14)

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