Internal decision-making rules and collusion∗
نویسندگان
چکیده
We study the impact of internal decision-making structures on the stability of collusive agreements. To this end, we use a three-firm spatial competition model where two firms belong to the same holding company. The holding company can decide to set prices itself or to delegate this decision to its local units. If collusion breaks down, the holding company may relocate its two local units. It turns out that collusion with maximum prices is more profitable and more stable if price setting is delegated to the local units. JEL classification: D43, L13, L41, R30.
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