Optimal collusion under imperfect monitoring in multimarket contact

Hajime Kobayashi and Katsunori Ohta

Games and Economic Behavior, 2012, vol. 76, issue 2, 636-647

Abstract: We investigate optimal collusion in repeated multimarket contact under imperfect public monitoring, where two firms operate in m markets and in each market, each firmʼs decision and public signals are binary. We show that in an optimal pure strategy strongly symmetric perfect public equilibrium, the size of efficiency loss is equal to that in the market with the most tempting deviation under single-market contact. Furthermore, we show a sufficient condition under which the symmetric equilibrium is optimal for joint payoff maximization among any perfect public equilibrium.

Keywords: Multimarket contact; Infinitely repeated games; Imperfect public monitoring (search for similar items in EconPapers)
JEL-codes: C72 C73 L13 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:76:y:2012:i:2:p:636-647

DOI: 10.1016/j.geb.2012.08.003

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