EconPapers    
Economics at your fingertips  
 

Collusion over the Business Cycle

Kyle Bagwell and Robert Staiger ()

No 5056, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present a theory of collusive pricing in markets subject to business cycle fluctuations. In the business cycle model that we adopt, market demand alternates stochastically between fast-growth (boom) and slow-growth (recession) phases. We provide a complete characterization of the most-collusive prices and show that: (1) the most-collusive prices may be procyclical (countercyclical) when demand growth rates are positively (negatively) correlated through time, and (2) the amplitude of the collusive pricing cycle is larger when the expected duration of boom phases decreases and when the expected duration of recession phases increases. We also offer a generalization of Rotemberg and Saloner's (1986) model, and interpret their findings in terms of transitory demand shocks that occur within broader business cycle phases.

JEL-codes: L1 (search for similar items in EconPapers)
Date: 1995-03
Note: EFG IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Published as Rand Journal of Economics, Vol. 28, no. 1, (Spring 1997), pp. 82-106.

Downloads: (external link)
http://www.nber.org/papers/w5056.pdf (application/pdf)

Related works:
Journal Article: Collusion Over the Business Cycle (1997) Downloads
Working Paper: Collusion Over the Business Cycle (1995)
Working Paper: Collusion Over the Business Cycle (1995) 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:nbr:nberwo:5056

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w5056

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-12-14
Handle: RePEc:nbr:nberwo:5056