Collusion when players take turns

Luis Corchon, Guadalupe Correa-Lopera and Bernardo Moreno

Economics Letters, 2026, vol. 263, issue C

Abstract: We present a model of two players who take turns to facilitate collusion. One of the players wins (contract, office), while the other loses by presenting a ludicrous proposal or no proposal at all. Assuming that players use grim trigger strategies, we show that it is possible to sustain agreements as a Subgame Perfect Nash Equilibrium (a) for a range of discount factors below one but above zero and (b) for two disjoint intervals of the discount factor.

Keywords: Collusion; Folk theorem; Taking turns (search for similar items in EconPapers)
JEL-codes: C72 C73 D43 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:263:y:2026:i:c:s0165176526001126

DOI: 10.1016/j.econlet.2026.112918

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