Strategic profit sharing leads to collusion in Bertrand oligopolies

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dc.contributor.author Ferreira, José Luis
dc.contributor.author Waddle, Roberts
dc.contributor.editor Universidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned 2010-12-14T09:25:22Z
dc.date.available 2010-12-14T09:25:22Z
dc.date.issued 2010-10
dc.identifier.issn 2340-5031
dc.identifier.uri http://hdl.handle.net/10016/9795
dc.description.abstract One simple way to endogenize the degree of cross ownership in an industry is that rms give away part of their pro ts. We show that this possibility of unilaterally giving pro ts away to the rival previous to Bertrand competition opens the door to multiple equilibria. In the symmetric duopoly with con- stant marginal costs any price between the cost and the monopolistic price can be sustained in a subgame perfect equilibrium. Thus, tacit collusion in the one shot game can be achieved. Further, any market share can also be sustained for any equilibrium price. These results are extended to more than two rms and to asymmetric costs.
dc.format.mimetype application/octet-stream
dc.format.mimetype application/octet-stream
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries UC3M Working papers. Economics
dc.relation.ispartofseries 10-36
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.other Profit sharing
dc.subject.other Oligopoly
dc.subject.other Collusion
dc.subject.other Cross ownership
dc.subject.other Bertrand
dc.title Strategic profit sharing leads to collusion in Bertrand oligopolies
dc.type workingPaper
dc.subject.jel L12
dc.subject.eciencia Economía
dc.rights.accessRights openAccess
dc.identifier.repec we1036
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