original papers: Buyers' and sellers' cartels on markets with indivisible goods

Francis Bloch and Sayantan Ghosal

Review of Economic Design, 2000, vol. 5, issue 2, 129-147

Abstract: This paper analyzes the formation of cartels of buyers and sellers in a simple model of trade inspired by Rubinstein and Wolinsky's (1990) bargaining model. When cartels are formed only on one side of the market, there is at most one stable cartel size. When cartels are formed sequentially on the two sides of the market, there is also at most one stable cartel configuration. Under bilateral collusion, buyers and sellers form cartels of equal sizes, and the cartels formed are smaller than under unilateral collusion. Both the buyers' and sellers' cartels choose to exclude only one trader from the market. This result suggests that there are limits to bilateral collusion, and that the threat of collusion on one side of the market does not lead to increased collusion on the other side.

Keywords: Bilateral collusion; buyers' and sellers' cartels; collusion in bargaining; countervailing power (search for similar items in EconPapers)
JEL-codes: C78 D43 (search for similar items in EconPapers)
Date: 2000-07-06
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.de/link/service/journals/10058/papers/0005002/00050129.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
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: https://EconPapers.repec.org/RePEc:spr:reecde:v:5:y:2000:i:2:p:129-147

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10058

Access Statistics for this article

Review of Economic Design is currently edited by Atila Abdulkadiroglu, Fuhito Kojima and Tilman Börgers

More articles in Review of Economic Design from Springer, Society for Economic Design
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().