Hub and spoke collusion by embargo

Patrick Van Cayseele and Simon Miegielsen

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: A common supplier (the hub) could try to enforce a collusive outcome between his buyers (the spokes) if they are unable to sustain such an agreement among themselves. We derive necessary and sufficient conditions under which the hub is willing to assume the policing role in a cartel.

Date: 2013-12
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:ces13.24

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