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Cartelizing Groups in Dynamic Linear Oligopoly with Antitrust ThresholdAkio MatsumotoChuo University Ugo MerloneUniversity of Turin - Department of Statistics and Applied Mathematics Ferenc SzidarovszkyUniversity of Arizona - Department of Systems & Industrial Engineering (SIE) December 2008 International Game Theory Review, Vol. 10, Issue 4, pp. 399-419, 2008 Abstract: The effects of partially cooperating firms are examined in N-firm oligopolies. The Herfindahl-Hirschmann Index is assumed to detect the violation of the antitrust regulation by the firms, and based on this assumption a piece-wise differentiable dynamic system can be developed. The firms stop cooperating if this index becomes larger than a certain threshold and they restart or continue cooperating otherwise. The equilibria of the dynamic system are first determined. Local and global asymptotic stability of the equilibria are then investigated showing the complexity of the dynamic behavior of the system.
Keywords: Oligopolies, partial cooperation, shareholding interlocks, antitrust regulation JEL Classification: C71 Accepted Paper SeriesDate posted: October 31, 2009Suggested CitationContact Information
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