Collusion with capacity constraints over the business cycle

Collusion with Capacity Constraints over the Business Cycle

This paper investigates the effect of capacity constraints on the sustainability of collusion in markets subject to cyclical demand fluctuations. In the absence of capacity constraints (i.e. a limiting case of our model), Haltiwanger and Harrington (1991) show that firms find it more difficult to collude during periods of decreasing demand. We find that this prediction can be overturned if firm...

Capacity Constraints , Asymmetries , and the Business Cycle

Bank Lending Behaviour over the Business Cycle in Iran

This paper studies bank loans over the business cycles in Iran to determine the role of Iranian banks in stabilizing credit. By estimating the long-run relations using dynamic OLS and fully modified OLS estimators, the findings show that real bank lending is positively related to real GDP in the long-run providing evidences of the pro-cyclicality of bank lending in Iran. Hence, Iranian banking ...

Oligopoly with Capacity Constraints and Thresholds

    Abstract   Extended Oligopoly models will be introduced and examined in which the firms might face capacity limits, thresholds for minimal and maximal moves, and antitrust thresholds in the case of partial cooperation. Similar situation occurs when there is an additional cost of output adjustment, which is discontinuous at zero due to set-up costs. In these cases the payoff functions of the...

Modeling Asymmetric Persistence over the Business Cycle

We address the issue of time varying persistence of shocks to macroeconomic time series variables by proposing a new and parsimonious time series model. Our model assumes that this time varying persistence depends on a linear combination of lagged explanatory variables, where this combination characterizes the business cycle regimes. The key feature of our model is that an autoregressive parame...