Strategic Delegation Improves Cartel Stability

Han, Martijn

doi:10.2139/ssrn.1729144

Abstract

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Strategic Delegation Improves Cartel Stability

Martijn A. Han

Humboldt University of Berlin

December 20, 2010

Amsterdam Center for Law & Economics Working Paper No. 2010-15

Abstract:
Fershtman and Judd (1987) and Sklivas (1987) show how strategic delegation in the one-shot Cournot game reduces firm profits. However, with infinitely repeated interaction, strategic delegation allows for an improvement in cartel stability compared to the infinitely repeated standard Cournot game, thereby actually increasing profits.

Number of Pages in PDF File: 9

Keywords: Strategic Delegation, Collusion, Cartel Stability

JEL Classification: D43, L13, L20, L41

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Date posted: December 21, 2010

Suggested Citation

Han, Martijn A., Strategic Delegation Improves Cartel Stability (December 20, 2010). Amsterdam Center for Law & Economics Working Paper No. 2010-15. Available at SSRN: http://ssrn.com/abstract=1729144 or http://dx.doi.org/10.2139/ssrn.1729144

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Martijn A. Han (Contact Author)

Humboldt University of Berlin ( email )

Spandauer Str. 1
Berlin, Berlin 10785
Germany

HOME PAGE: http://www.martijnhan.com