International Cartels with Territorial Allocation: A Model with Paradoxical Implications

Aditya Bhattacharjea and Uday Sinha

Indian Economic Review, 2016, vol. 51, issue 1, 181-195

Abstract: In this paper, we model collusion based on territorial allocation of markets between price-setting oligopolists in a standard supergame framework. We show that a reduction in trade costs or an increase in the number of firms can paradoxically increase the sustainability of collusion. We discuss several implications for trade and antitrust policy in this context. In particular, reduction of barriers to trade and domestic entry can reduce welfare, and some welfare-increasing mergers may be wrongly disallowed.

Keywords: Multimarket Contact; Trade Costs; Trade Liberalization; International Cartels; Antitrust. (search for similar items in EconPapers)
JEL-codes: D43 F12 F15 L41 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:dse:indecr:0117

Ordering information: This journal article can be ordered from
http://www.ierdse.org/

Access Statistics for this article

Indian Economic Review is currently edited by Pami Dua (Editor) & Ram Singh (Associate Editor) and Sunil Kanwar

More articles in Indian Economic Review from Department of Economics, Delhi School of Economics University of Delhi, Delhi 110 007. Contact information at EDIRC.
Bibliographic data for series maintained by Pami Dua ().