COMPETITIVENESS AND STABILITY OF COLLUSIVE BEHAVIOR |
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| Authors: | Toshihiro Matsumura Noriaki Matsushima |
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| Institution: | 1. Institute of Social Science, the University of Tokyo;2. Institute of Social and Economic Research, Osaka University |
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| Abstract: | We investigate the relationship between the degree of competition and the stability of collusive behaviour, by introducing the element of relative performance in the objective functions of the firms. We show that an increase in the degree of competition destabilizes the collusion. This relation differs starkly in the standard symmetric Cournot and Bertrand duopoly models, with the former being more unstable than the latter. |
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| Keywords: | competitiveness relative profit stability of collusion tacit collusion L13 L41 |
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