Delegation and Cartel Stability

Luca Lambertini ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: The effect of delegation on cartel stability is addressed in a duopoly for a homogeneous product, under Cournot competition. The main findings are that if only one firm is managerial, the critical discount factor is increased by the presence of a weight attached to sales, so that cartel stability is decreased, while if both are managerial the opposite holds. As a consequence, the inclusion of sales in both firms objective function represents an incentive towards collusion.

Date: 1994-11
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:208

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