Competitive prices as optimal cartel prices

Harold Houba, Evgenia Motchenkova and Quan Wen ()

Economics Letters, 2012, vol. 114, issue 1, 39-42

Abstract: In a linear oligopoly model with antitrust enforcement, the optimal cartel price converges to the competitive equilibrium price. The set of sustainable cartel prices does not shrink to the competitive price. We identify necessary conditions for this counter-intuitive convergence result.

Keywords: Antitrust enforcement; Cartel; Oligopoly; Repeated game (search for similar items in EconPapers)
JEL-codes: C73 L4 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:114:y:2012:i:1:p:39-42

DOI: 10.1016/j.econlet.2011.08.021

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