Economics at your fingertips  

Collusion Over the Business Cycle

Kyle Bagwell and Robert Staiger ()

RAND Journal of Economics, 1997, vol. 28, issue 1, 82-106

Abstract: We present a theory of collusive pricing for markets in which demand alternates stochastically between fast-growth (boom) and slow-growth (recession) phases. We show that (1) the most-collusive prices are weakly procyclical (countercyclical) when demand growth rates are positively (negatively) correlated through time, and (2) the amplitude of the collusive pricing cycle is larger when the expected duration of boom phases decreases and when the expected duration of recession phases increases. We also offer a generalization of Rotemberg and Saloner's (1986) model, interpreting their findings in terms of transitory demand shocks that occur within broader business cycle phases.

Date: 1997
References: Add references at CitEc
Citations: View citations in EconPapers (77) Track citations by RSS feed

Downloads: (external link) ... O%3B2-7&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See for details.

Related works:
Working Paper: Collusion Over the Business Cycle (1995)
Working Paper: Collusion over the Business Cycle (1995) Downloads
Working Paper: Collusion Over the Business Cycle (1995) Downloads
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:

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().

Page updated 2020-01-21
Handle: RePEc:rje:randje:v:28:y:1997:i:spring:p:82-106