Abstract

http://ssrn.com/abstract=906942
 
 

Citations (5)



 


 



The Comparative Statics of Collusion Models


Kai-Uwe Kuhn


University of Michigan at Ann Arbor - Department of Economics; Centre for Economic Policy Research (CEPR)

Michael S. Rimler


Xavier University - Williams College of Business Administration - Department of Economics and Human Resources

May 2006


Abstract:     
We develop and illustrate a methodology for obtaining robust comparative statics results for collusion models in markets with differentiated goods by analyzing the homogeneous goods limit of these models. This analysis reveals that the impact of parameter changes on the incentives to deviate from collusion and the punishment profits are often of different order of magnitude yielding comparative statics results that are robust to the functional form of the demand system. We demonstrate with numerical calculations that these limiting results predict the global comparative statics at any degree of product differentiation. We use this methodology to demonstrate the non-robustness of Nash reversion equilibria and to develop new results in the comparative statics of collusion.

Number of Pages in PDF File: 53

Keywords: collusion, robustness, comparative statics, product differentiation, cross-ownership

JEL Classification: D43, L13, L41

working papers series


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Date posted: June 8, 2006  

Suggested Citation

Kuhn, Kai-Uwe and Rimler, Michael S., The Comparative Statics of Collusion Models (May 2006). Available at SSRN: http://ssrn.com/abstract=906942 or http://dx.doi.org/10.2139/ssrn.906942

Contact Information

Kai-Uwe Kuhn (Contact Author)
University of Michigan at Ann Arbor - Department of Economics ( email )
611 Tappan Street
Ann Arbor, MI 48109-1220
United States
734-763-5317 (Phone)
734-764-2769 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Michael S. Rimler
Xavier University - Williams College of Business Administration - Department of Economics and Human Resources ( email )
3800 Victory Parkway
Cincinnati, OH 45207
United States
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