SUSTAINING COLLUSION IN GROWING MARKETS

• Type: Article in International Scientific Journal
• Date: 2008

Authors

Helder Vasconcelos (Author) FEP

Journal

Title: JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY

Vol. 17 No. Number 4, Winter 2008

Pages: 973-1010

ISSN: 1058-6407

Publisher: John Wiley & Sons

Indexing

ISI Web of Knowledge - 9 Citations

ISI Web of Science

Scopus - 11 Citations

Econlit

Scientific classification

FOS: Social sciences > Economics and Business

Other information

Authenticus ID: P-003-TJ1

DOI: 10.1111/j.1530-9134.2008.00202.x

Abstract (EN): The impact of demand growth on the collusion possibilities is investigated in a Cournot supergame where market growth may trigger future entry and the collusive agreement is enforced by the most profitable 'grim trigger strategies' available. It is shown that even in situations where perfect collusion can be sustained after entry, coping with a potential entrant in a market which is growing over time may completely undermine any pre-entry collusive plans of the incumbent firms. This is because, before entry, a deviation and the following punishment phase may become more attractive thanks to their additional effect in terms of delaying entry.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 38