Tacit Collusion in a Segmented and Capacity Constrained Informal Rural Credit Market

Magnus Hatlebakk ()

Norway; Department of Economics, University of Bergen from Department of Economics, University of Bergen

Abstract: To be able to describe informal rural credit markets, we apply the Brock and Scheinkman model of a price setting and capacity constrained oligopoly, where firms tacitly collude on monopoly pricing. We generalise the model to allow for third-degree price discrimination. The interval of aggregate lending capacity that supports a counter-intuitively increasing part of the equilibrium price-function is smaller than for the uniform price case.

Keywords: DISCRIMINATION; PRICES; MARKET; CREDIT (search for similar items in EconPapers)
JEL-codes: D43 O16 Q14 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:fth:bereco:2200

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