Tacit collusion under interest rate fluctuations

• 成果类型: Article
• 署名作者: Dal Bo, Pedro
• 署名单位: Brown University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• 发表日期: 2007
• 页码: 533-540
• 关键词: joint executive-committee; market imperfections; cartel stability; price wars; demand; booms

摘要

Previous literature has shown that demand fluctuations affect the scope for tacit collusion. I study whether discount factor fluctuations can have similar effects. I find that collusion depends not only on the level of the discount factor but also, and more surprisingly, on its volatility. Collusive prices and profits increase with a higher discount factor level, but decrease with its volatility. These results have important implications for empirical studies of collusive pricing, the role that collusive pricing may play in economic cycles and the study of cooperation in repeated games.