On prices’ cyclical behaviour in oligopolistic markets
Luca Lambertini (luca.lambertini@unibo.it) and
Luigi Marattin
Research in Economics, 2021, vol. 75, issue 1, 79-86
Abstract:
We revisit the discussion about the relationship between price’s cyclical features, implicit collusion and the demand level in an oligopoly supergame where a positive shock may hit demand and disrupt collusion. The novel feature of our model consists in characterising the post-shock noncooperative price and comparing it against the cartel price played in the last period of the collusive path, to single out the conditions for procyclicality to arise both in the short and in the long-run. This poses an issue in terms of an antitrust agency’s ability to draw well defined conclusions on the firms’ behaviour after the occurrence of the shock, with particular reference for the litigation phase after a cartel breakdown.
Keywords: Demand shocks; Cyclical pricing; Tacit collusion (search for similar items in EconPapers)
JEL-codes: C73 E60 L13 (search for similar items in EconPapers)
Date: 2021
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Related works:
Working Paper: On Prices' Cyclical Behaviour in Oligopolistic Markets (2016)
Working Paper: On Prices' Cyclical Behaviour in Oligopolistic Markets (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:75:y:2021:i:1:p:79-86
DOI: 10.1016/j.rie.2020.11.003
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