 Tacit Collusion, Cost Asymmetries, and MergersRAND Journal of Economics, 2005, vol. 36, issue 1, 39-62 Abstract: This article contributes to the analysis of tacit collusion in quantity-setting supergames involving cost-asymmetric firms. Asymmetry is dealt with by assuming that firms have a different share of a specific asset that affects marginal costs. The model extends optimal punishment schemes in the style of Abreu (1986, 1988) and provides conditions for industrywide collusion to be enforced. From the analysis of the impact of asset transfers on the sustainability of tacit collusion, merger policy implications can be drawn. In particular, I show that if the merger induces an increase in the inequality of asset holdings, this will hinder collusion. Keywords: Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance Market Structure, Firm Strategy, and Market Performance: Monopoly; Monopolization Strategies (cartels; collusion) Market Structure, Firm Strategy, and Market Performance: Oligopoly and Other Imperfect Markets; monopolistic competition; contestable markets Collusion; Firm; Firms; Merger; Shares (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:rje:randje:v:36:y:2005:1:p:39-62 Ordering information: This journal article can be ordered from Access Statistics for this article More articles in RAND Journal of Economics from The RAND Corporation |
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