EconPapers    
Economics at your fingertips  
 

Tacit collusion in a one-shot game of price competition with soft capacity constraints

Marie-Laure Cabon-Dhersin () and Nicolas Drouhin ()
Additional contact information
Marie-Laure Cabon-Dhersin: CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université

Working Papers from HAL

Abstract: This paper analyses price competition in the case of two firms operating under constant returns to scale with more than one production factor. Factors are chosen sequentially in a two-stage game generating a soft capacity constraint and implying a convex short term cost function in the second stage of the game. We show that tacit collusion is the only predictable result of the whole game i.e. the unique payoff-dominant pure strategy Nash equilibrium. Technically, this paper bridges the capacity constraint literature on price competition and that of the convex cost function.

Keywords: price competition; tacit collusion; convex cost; Bertrand Paradox; capacity constraint (search for similar items in EconPapers)
Date: 2012-06-12
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00709093v2
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://hal.archives-ouvertes.fr/hal-00709093v2/document (application/pdf)

Related works:
Journal Article: Tacit Collusion in a One‐Shot Game of Price Competition with Soft Capacity Constraints (2014) Downloads
Working Paper: Tacit Collusion in a One-Shot Game of Price Competition with Soft Capacity Constraints (2014)
Working Paper: Tacit Collusion in a One-Shot Game of Price Competition with Soft Capacity Constraints (2014)
Working Paper: Tacit collusion in a one-shot game of price competition with soft capacity constraints (2012) Downloads
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:hal:wpaper:hal-00709093

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2021-09-14
Handle: RePEc:hal:wpaper:hal-00709093