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| Content Provider | Springer Nature Link |
|---|---|
| Author | Correia da Silva, João Pinho, Joana Vasconcelos, Hélder |
| Copyright Year | 2015 |
| Abstract | This paper studies the sustainability of collusion in markets where growth is not restricted to occur at a constant rate and may trigger future entry. Entry typically occurs later along the punishment path than along the collusive path (since profits are lower in the former case), and may not even occur along the punishment path. The possibility of delaying or even deterring entry may, therefore, constitute an additional incentive for deviating just before entry is supposed to occur along the collusive path. If firms set quantities and revert to Cournot equilibrium after a deviation, this incentive more than compensates for the fact that there are more firms after entry, making collusion harder to sustain before entry than after entry. If, instead, firms set prices or use optimal penal codes, deterring entry by breaking the cartel is not profitable, and thus collusion is harder to sustain after entry than before entry. The proposed model encompasses and explains conflicting results derived in the extant literature under more restrictive settings, and derives some novel results. |
| Starting Page | 1 |
| Ending Page | 34 |
| Page Count | 34 |
| File Format | |
| ISSN | 09318658 |
| Journal | Journal of Economics |
| Volume Number | 118 |
| Issue Number | 1 |
| e-ISSN | 16177134 |
| Language | English |
| Publisher | Springer Vienna |
| Publisher Date | 2015-11-21 |
| Publisher Place | Vienna |
| Access Restriction | One Nation One Subscription (ONOS) |
| Subject Keyword | Collusion Entry Market growth Economics Economic Theory/Quantitative Economics/Mathematical Methods Microeconomics Macroeconomics/Monetary Economics//Financial Economics Public Finance & Economics Game Theory, Economics, Social and Behav. Sciences |
| Content Type | Text |
| Resource Type | Article |
| Subject | Economics and Econometrics Business, Management and Accounting |
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