A Note on Stable Cartels

Mao, Liang (2017): A Note on Stable Cartels.

Abstract

In non-cooperative open membership cartel formation games, it is usually assumed that cartel members will maximize their joint payoffs. Through an example, this note shows that this assumption is problematic, because it imposes some unnecessary restrictions on cartel members' actions. We recommend that the cartel agreement should be endogenously determined in future studies.

• Item Type: MPRA Paper
• Language: English
• Keywords: cartel formation, stable cartel, self-enforcing agreement
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C79 - Other; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods

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