Collusion and predation under Cournot competition

Emilie Dargaud, Maxime Menuet and Petros G. Sekeris

Managerial and Decision Economics, 2024, vol. 45, issue 1, 315-325

Abstract: This paper studies how predation strategies can affect the sustainability of collusion in a duopoly. Collusion may be sustained at equilibrium for intermediate discount factors. In such instances, predation implies that punishment strategies will yield low subgame perfect payoffs, thereby making collusion easier to sustain. For low discount factors, collusion is not sustainable because of the high incentives to deviate to Cournot–Nash strategies. Moreover, for high discount factors, it is always optimal to predate a colluding firm, thus contrasting with much of the earlier literature showing that collusion is only achievable by sufficiently patient firms.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/mde.4004

Related works:
Working Paper: Collusion and Predation Under Cournot Competition * (2023)
Working Paper: Collusion and Predation Under Cournot Competition (2022)
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:wly:mgtdec:v:45:y:2024:i:1:p:315-325

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().