Process of dominant-cartel formation

Article Abstract:

The process of cartel formation and its characterization as a collusive price leader were discussed through the models of sequential-moves and simultaneous-moves games. In the sequential-moves model, the potential creation of a dominant cartel was highlighted with the firms required to have commitment power to refuse the cartel membership. The process of cartel formation without commitment power was modeled by the simultaneous-moves game which also showed the improbability of forming an actual stable cartel even though the theoretical presence of such a cartel was proven.

Pricing Policy, Pricing, Monopolistic competition

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Cartel stability and product differentiation

Article Abstract:

Supergame models of collusion indicate that product differentiation allows room for cartel stability when collusive agreements do not pose problems. Although the degree of differentiation may reflect price fixing, other variables such as asymmetrical relationships between companies affect merger conclusion. Firms have less incentive to cheat given product heterogeneity because there will be less profits. The market for cartels would then be more stable.

Models, Product differentiation

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Internal cartel stability with time-dependent detection probabilities

Article Abstract:

A study conducted to analyze the cartels' behavior and stability using detection probability theory is presented.

Netherlands, Usage, Behavior, Probabilities, Probability theory

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