A note on the stability of collusion in differentiated oligopolies
نویسنده
چکیده
Stability of collusion in differentiated oligopolies is studied without symmetry restrictions on the available strategies. It is demonstrated that if the number of firms is sufficiently large, two-phase stick-and-carrot punishment schemes apply at the highest possible discount rate with respect to collusion on the joint profit-maximizing output. If stick-and-carrot punishment schemes are used, collusive stability of the joint profit-maximizing output improves monotonically with the degree of product differentiation. The conclusions contrast with those obtained by Wernerfelt [Economics Lett. 29 (1989) 303]. q 2003 Elsevier Science Ltd. All rights reserved. JEL classification: C72; L13
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