Mutual forbearance as an extension of oligopoly theory

This paper extends a simple duopoly model to include the cross-market effects of mutual forbearance behavior. The model yields more familiar duopoly results as special cases. A more general m-firm, n-market oligopoly model is also considered. The results suggest that cross-market mutual forbearance effects can be viewed from the same theoretical perspective as are conventional assumptions about conjectural variations within markets.