Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Thursday, February 17, 2011

Farsighted Coalitional Stability of a Price Leadership Cartel

Posted by D. Daniel Sokol

Yoshio Kamijo (Waseda University) and Shigeo Muto (Tokyo Institute of Technology) describe Farsighted Coalitional Stability of a Price Leadership Cartel.

ABSTRACT: This paper analyzes the farsighted behaviour of firms that form a dominant price leadership cartel. We consider stability concepts such as the farsighted core, the farsighted stable sets, and the largest consistent set. We show that: (i) the farsighted core is either an empty set or a singleton set of the grand cartel; (ii) any Pareto efficient cartel is itself a farsighted stable set; and (iii) the set of cartels in which fringe firms enjoy higher profits than the firms in the minimal Pareto efficient cartel is the largest consistent set.

http://lawprofessors.typepad.com/antitrustprof_blog/2011/02/farsighted-coalitional-stability-of-a-price-leadership-cartel.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef0147e1bdce49970b

Listed below are links to weblogs that reference Farsighted Coalitional Stability of a Price Leadership Cartel:

Comments

Post a comment