9 Pages Posted: 21 Dec 2010
Date Written: December 20, 2010
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.
Keywords: Strategic Delegation, Collusion, Cartel Stability
JEL Classification: D43, L13, L20, L41
Suggested Citation: 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: https://ssrn.com/abstract=1729144 or http://dx.doi.org/10.2139/ssrn.1729144
By Xiaoyun Yu