Sequential play and cartel stability in a Cournot oligopoly

Currarini, Sergio and Marini, Marco A. (2002): Sequential play and cartel stability in a Cournot oligopoly.

Abstract

We reconsider the problem of cartel stability in a linear symmetric Cournot oligopoly by assuming that every coalition of firms defecting from a cartel can choose its quantity before the remaining firms. We show that differently from Salant et al. (1983) the only profitable cartel includes all firms in the industry. This result is shown to be robust to non linearities in payffs provided that the inverse demand function is not too log-concave.

• Item Type: MPRA Paper
• Language: English
• Keywords: Cartel Stability, Cournot Oligopoly
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D40 - General

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