Collusion and heterogeneity of firms

• 成果类型: Article
• 署名作者: Obara, Ichiro; Zincenko, Federico
• 署名单位: University of California System; University of California Los Angeles; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• 发表日期: 2017
• 页码: 230-249
• 关键词: price-setting supergames; capacity constraints; repeated games; tacit collusion; BEHAVIOR; MARKETS; duopoly; mergers; payoffs; MODEL

摘要

We examine the impact of heterogeneous discounting on collusion in dynamic Bertrand competition. We show exactly when collusion can be sustained and how collusion would be organized efficiently with heterogeneous discounting. First, we show that collusion is possible if and only if the average discount factor exceeds a certain threshold, with or without capacity constraints. Next, we identify a dynamic pattern of market share that characterizes efficient collusion and obtain the unique long-run prediction despite the presence of multiple equilibria. In the long run, the most patient firm and the most impatient firm tend to dominate the market.