Antitrust & Competition Policy Blog

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

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Wednesday, December 12, 2012

Strategic Delegation Improves Cartel Stability

Posted by D. Daniel Sokol Martijn A. Han (Humboldt University) claims Strategic Delegation Improves Cartel Stability. ABSTRACT: Fershtman and Judd (1987) and Sklivas (1987) show that strategic delegation reduces firm profits in the one-shot Cournot game. Allowing for infinitely repeated interaction, strategic delegation can increase firm profits as it improves cartel stability.

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