Collusion Between Supply Chains under Asymmetric Information

Yaron Yehezkel

Journal of Industrial Economics, 2024, vol. 72, issue 3, 1195-1226

Abstract: This paper considers an infinitely repeated competition between manufacturer‐retailer supply chains. In every period, retailers privately observe the demand and manufacturers pay retailers ‘information rents’. I study collusive equilibria between the supply chains that may or may not involve the retailers. I find that including forward‐looking retailers in the collusive scheme may facilitate or hinder collusion, depending on the likelihood of a high demand and the gap between a high and a low demand. Moreover, collusion on monopoly profits can be easier or more difficult to implement than collusion on upstream profits.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jindec:v:72:y:2024:i:3:p:1195-1226

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