Collusive outcomes in price competition |
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Authors: | Krishnendu Ghosh Dastidar |
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Institution: | (1) Present address: Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, 110067 New Delhi, India |
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Abstract: | In this paper we provide a sufficient condition for collusive outcomes in a single-shot game of simultaneous price choice
in a homogeneous product market with symmetric firms and strictly convex costs. We also prove the counterintuitive result:
if the second derivative of the cost function is nonincreasing in output, it is easier to sustain collusion when the number
of firms increases. |
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Keywords: | price competition collusion convex cost |
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