Stability of Price Leadership Cartel with Endogenous Pricing
نویسندگان
چکیده
This paper studies farsighted behavior of firms in an oligopolistic market to form a dominant cartel, which has a power to set and control the price in the market. The von Neumann-Morgenstern stable set is adopted as the solution concept. In contrast to the literature, we do not assume a priori the optimal pricing behavior of the cartel; rather, we show that such behavior arises from the result of firms’ consideration on the stability. JEL classification: C71, D43, L13.
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