January 27, 2011
Strategic Delegation Improves Cartel Stability
Posted by D. Daniel Sokol
ABSTRACT: 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.
January 27, 2011 | Permalink
TrackBack URL for this entry:
Listed below are links to weblogs that reference Strategic Delegation Improves Cartel Stability :