Cartel Sustainability and Cartel Stability

Marc Escrihuela-Villar ()

No 2004.44, Working Papers from Fondazione Eni Enrico Mattei

Abstract: The paper studies how does the size of a cartel affect the possibility that its members can sustain a collusive agreement. I obtain that collusion is easier to sustain the larger the cartel is. Then, I explore the implications of this result on the incentives of firms to participate in a cartel. Firms will be more willing to participate because otherwise, they risk that collusion completely collapses, as remaining cartel members are unable to sustain collusion.

Keywords: Collusion; Partial cartels; Trigger strategies; Optimal punishment (search for similar items in EconPapers)
JEL-codes: D43 L11 L13 L41 (search for similar items in EconPapers)
Date: 2004-03
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: CARTEL SUSTAINABILITY AND CARTEL STABILITY (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2004.44

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